Software roars back. The labor market won't crack

Rundown · 2026-08-28

Nvidia's guide lit the whole complex. The Nasdaq rose 1.6% against the Dow's 0.2%, and software did the heavy lifting: Okta +28.6%, Salesforce +22%, CrowdStrike +20.5%. Underneath it, claims fell to 203,000 and continuing claims eased again. Warsh delivers his first Jackson Hole keynote this morning.

Market Performance

Nasdaq: 26,541.35 (+1.6%) — +411.16 pts, far and away the leader
S&P 500: 7,730.99 (+0.7%) — +55.29 pts
Dow: 53,569.44 (+0.2%) — +105.56 pts, left behind by a tech-only tape
10Y: about 4.67%, ticking up; 30Y ~5.20%, 2Y ~4.23% and flat
WTI: about $82.90, roughly unchanged · Gold: $4,643.40 (-0.44%) · Bitcoin ~$79,400, flat
Asian and European equities were mostly lower overnight; the dollar was little changed

The spread is the story. A 1.4-point gap between the Nasdaq and the Dow is not a broad risk-on session — it is one theme being repriced while everything else sits still.

Software Roars Back

Nvidia's guide gave the entire enterprise-software complex permission to re-rate, and it moved harder than the chips did
Okta +28.6% · Salesforce +22% · CrowdStrike +20.5% — three double-digit-plus moves in one session
Salesforce had its best day since August 2020, on a Q2 beat, raised full-year guidance and an expanded AI partnership
CrowdStrike reported record net new ARR — the metric that matters most for a subscription security business, because it measures new committed revenue rather than backward-looking billings
The read-through: for two years the market has argued AI would *disintermediate* software by making applications cheap to rebuild. This session priced the opposite — that the incumbents with distribution and data are the ones who monetise it
Worth noting what this was not. Nvidia itself rose about 8%, less than half what the software names did. The bigger move was in the companies buying the chips, not selling them

Nvidia Delivers the Follow-Through

Nvidia closed up roughly 8% after Wednesday's after-hours guide of $108B against $104.2B expected
The reassurance was about duration, not the quarter. Huang's forecast of roughly 70% revenue growth for fiscal 2028 answered the question the market actually had, which is whether the pace is sustainable
On the call Huang put it bluntly: "the only regret that I have is that I didn't invest more and sooner."
Remember the guide contains no China data center revenue at all — the growth is being underwritten without it
Monday's de-risking now looks like the setup rather than the signal. The complex sold ahead of the print and bought it back with interest

The Labor Market Won't Crack

Initial jobless claims fell to 203,000 in the week ending August 22, below forecasts near 208,000 and down 4,000 from a revised 207,000
Continuing claims eased to 1.778 million from 1.796 million
Unemployment stands at 4.1%, just below the Fed's 4.2% longer-run estimate of full employment
Put that against Wednesday's PCE, where core held at 3.3%, and the hawkish case writes itself: inflation above target and a labor market that refuses to loosen is the textbook argument for tightening
This is the third consecutive week the data has failed to give the doves anything
With 96% of the S&P 500 reported, 86% have beaten estimates. Earnings are not the constraint on this market; the policy rate is

Hormuz: Less Than It Looks

WTI finished around $82.90, essentially unchanged, despite headlines about an Iran-Oman arrangement over the Strait of Hormuz
Iran's Revolutionary Guards announced the two countries had agreed how to split control and revenue from tolls on vessels crossing the Strait
But read the fine print. The joint foreign-ministry statement described only an "interim framework" for resuming transits, stopped short of a final deal, and did not mention fees at all
More to the point: Iran said the Strait will not reopen unless the United States agrees to its conditions
That gap between the IRGC's framing and the diplomatic language is why crude went nowhere. The market read the announcement and declined to pay for it
Crude has now spent four sessions between $81 and $83 after falling from $87. The war premium is out; the resolution is not in

Notable Movers

(OKTA) +28.6% — The largest move in a software complex that re-rated together on Nvidia's demand signal
(CRM) +22% — Its best day since August 2020, on a Q2 beat, raised full-year guidance and an expanded AI partnership
(CRWD) +20.5% — Reported record net new ARR, the cleanest read on new committed revenue in a subscription security model
(WEN) -14% — Trian Fund Management, its largest shareholder, will not pursue a take-private deal. The stock had been carrying a buyout premium, and it came out in one session
(NVDA) +8% — Delivered the follow-through to Wednesday's guide, though it lagged the software names it lifted

Cross-Asset

Nothing outside equities moved much, which is itself the point on the day before a new Fed chair's first keynote:

Asset · Level · Change · Read

10-Year yield · about 4.67% · ticked up · Strong claims, sticky core PCE

2-Year yield · about 4.23% · flat · Frozen again — waiting on Warsh

WTI crude · about $82.90 · roughly flat · Hormuz headline not paid for

Gold · $4,643.40 · about -0.44% · Drifting off its three-month high

The 2Y has now been effectively unchanged for the better part of two weeks. The front end is not taking a position before it hears from the chair
Bitcoin held near $79,400, flat, having gone quiet after its 22% week
The dollar was little changed. Everything that reprices on policy is parked; everything that reprices on earnings moved hard

Private Dealmaking

KKR and IMM Investment agreed to invest about $2.2B in SK Broadband (a corporate investment, not a venture round)
Instinct (AI assistant startup) is reported to be raising — $250M
Socure (identity verification) — $156M
Regent Craft (electric maritime vessels) — ~$120M
Gestala (brain-computer interfaces · China) — $84M
Stability AI (generative AI models) — $75M

What To Watch

This morning: Kevin Warsh's first Jackson Hole keynote, scheduled for 8:00am ET. The dollar index typically moves 0.5-1.5% in the two hours after
The setup he inherits: core PCE at 3.3%, claims at 203K, three dissents for a hike in July, and a market pricing better than 40% odds of a September move
CPI and the labor prints before September 16 — the meeting where it actually gets decided
September 8: Canada's retaliatory tariffs take effect, matching dollar for dollar
September 9: the first enlarged Treasury buyback operation
Watch whether the software re-rating holds a week. One session on one guide is a repricing; a month is a thesis

TLDR

Nasdaq +1.6% to 26,541.35, S&P +0.7% to 7,730.99, Dow +0.2% — a 1.4-point spread, tech only
Software roared: Okta +28.6%, Salesforce +22%, CrowdStrike +20.5% — bigger moves than Nvidia's own +8%
Salesforce had its best day since August 2020; CrowdStrike posted record net new ARR
Claims fell to 203,000 against forecasts near 208,000; continuing claims eased to 1.778M
Unemployment at 4.1%, just under the Fed's 4.2% longer-run estimate — the labor market still isn't loosening
WTI flat near $82.90 despite an Iran-Oman Hormuz headline: the joint statement was only an "interim framework" and Iran says the Strait stays shut pending US conditions
WEN -14% as Trian walked away from a take-private; 96% of the S&P has reported, 86% beating

The Bottom Line

The market spent Thursday answering a question it had been asking for two years, and the answer surprised people. Nvidia's guide was supposed to be a chip story; instead the biggest moves went to the companies that *buy* the chips — Okta up 28.6%, Salesforce 22%, CrowdStrike 20.5%, all of them well past Nvidia's own 8%. That is the market deciding AI accrues to incumbent software rather than destroying it, and it is a genuinely new position. Underneath the enthusiasm, the macro did not cooperate: claims fell to 203,000, continuing claims eased again, unemployment sits below the Fed's own full-employment estimate, and core PCE is still 3.3%. Strong earnings and a tight labor market are wonderful for equities and terrible for anyone hoping the September hike talk goes away. Warsh steps to the podium this morning holding exactly that hand — an economy that will not slow and an inflation rate that will not fall — and it is his first time explaining what he intends to do about it.

_For informational purposes only. Not investment advice._