US August Employment Exceeds Expectations, Markets Bet Heavily on Fed Rate Hike

US August employment data came in stronger than expected, leading the market to renew bets that the Federal Reserve may raise interest rates, but Wall Street risk assets did not show significant panic. The data shows that the resilience of the labor market has increased, and traders have raised their expectations for a rate hike at the Federal Reserve's September 16 meeting. US Treasury bonds faced sell-offs, the US dollar strengthened, and the S&P 500 index fell on Friday, but still posted a weekly gain. Unlike previous periods where rising interest rates usually triggered capital outflows, this wave of adjustment in the bond market has not yet spilled over into other risk assets. Credit spreads remain low, and pressures on the corporate bond and equity index markets are limited. JPMorgan stated that there has been a noticeable deterioration in US Treasury liquidity, but similar tensions have not yet appeared in corporate bond ETF and equity index futures markets. Market resilience mainly comes from economic growth and corporate earnings, especially as investments in artificial intelligence are still enabling technology companies to maintain large-scale capital expenditures. Analysts have pointed out that the market's current focus is more on whether yields will rise rapidly, rather than on a single employment report itself. Going forward, the market's attention will turn to inflation data and whether the Federal Reserve will reconsider its interest-rate path due to inflationary pressures. If yields rise rapidly further, investors may be forced to reduce their risk exposure.