Stock Market Today, Aug. 7: Markets Rally on Jobs Shock and Atlassian Surges 35%

U.S. equities rallied to record highs on August 7, 2026, as a surprise July payroll contraction fueled expectations for rate cuts. The S&P 500 climbed 0.62%, the Nasdaq jumped 1.30%, and the Dow added 0.28%.

Atlassian soared 35% on stronger-than-expected quarterly results, while Twilio surged 25% following its own earnings beat. Trade Desk and Papa John's International fell after posting disappointing quarterly numbers.

The Bank of America bull-and-bear indicator reached its highest reading since 2021, a contrarian signal that historically precedes market pullbacks. Bank of America analysts responded by advising clients to rotate into defensive sectors as sentiment approaches euphoric levels.

The jobs data shocked markets by showing payroll declines when economists had anticipated modest growth, raising the probability of Federal Reserve rate cuts at upcoming meetings. The combination of record index levels and extreme sentiment readings suggests markets have priced in significant monetary easing.