Jobs Surge Raises Odds of September Fed Hike

Watch on YouTube ↗  |  September 05, 2026 at 15:36  |  11:07  |  Bloomberg Markets
Speakers
Jonathan Golub — Chief US Equity Strategist, UBS

Summary

Seaport Research Partners Chief Equity Strategist Jonathan Golub discusses a strong US jobs report and its implications for Fed policy, saying the market is correctly pricing a rate hike. He also argues that strong earnings and low valuations support equities, especially technology, while energy and banks are standout sectors. His bigger concern is that heavy AI investment and government borrowing will compete for capital and push ten-year Treasury yields higher.

  • The jobs report was strong, with revisions confirming a robust economy and reinforcing Fed hike expectations.
  • Political pressure for lower rates is not expected to sway the Fed.
  • Earnings season grew about 55% year over year, far above the typical 9%.
  • Energy sector earnings grew around 140%, helped by US oil exporter status.
  • Banks also surprised to the upside on lending and IPO activity.
  • Tech valuations are below long-term averages, while non-tech is seen as expensive.
  • Heavy AI capex financing plus government borrowing may push long-term Treasury yields higher.
  • NVIDIA-Hugging Face is framed as large tech cash deployment into the AI ecosystem.
Ideas
Jonathan Golub Chief US Equity Strategist, UBS 0:18
Strong jobs report makes Fed hike likely.
The jobs report was even stronger than the payroll number suggests, with upward revisions and broad labor absorption confirming a robust economy; the market is correctly pricing that the Fed will raise rates, especially after Fed Chair Walsh signaled he is inclined to hike when data look strong.
Fed Funds Rate HIGH
Jonathan Golub Chief US Equity Strategist, UBS 3:36
US earnings strength supports equities.
Earnings season grew about 55% year-over-year versus a typical 9%, boosted partly by one-time items but also by broad strength; Golub remains pretty optimistic and says valuations are low, so the equity market is not signaling stretched valuations or a crash.
SPY MED
Jonathan Golub Chief US Equity Strategist, UBS 5:39
US oil exporter status boosts energy earnings.
Higher oil prices are normally seen as a negative, but the US is an oil exporter; the energy sector grew earnings roughly 140% and, even at only about 4% of the S&P 500, added significantly to overall earnings.
XLE MED
Jonathan Golub Chief US Equity Strategist, UBS 5:59
Banks earnings beat on lending, IPOs.
Banks are doing enormous lending and IPO/capital markets activity, generating strong profits; estimates had not reflected this strength and banks delivered better-than-expected results.
KBE MED
Jonathan Golub Chief US Equity Strategist, UBS 7:01
Tech valuations cheap versus non-tech.
US tech valuations are below their long-term average because earnings rose faster than prices; if anything is expensive, it is non-tech where earnings are not coming through, so tech offers relative value.
XLK HIGH
Jonathan Golub Chief US Equity Strategist, UBS 7:01
Tech valuations cheap versus non-tech.
US tech valuations are below their long-term average because earnings rose faster than prices; if anything is expensive, it is non-tech where earnings are not coming through, so tech offers relative value.
US Non-Tech Sectors HIGH
Jonathan Golub Chief US Equity Strategist, UBS 8:07
Capital competition pushes ten-year yields higher.
Record AI/data center capital raises and direct financing must be added to the largest increase in government deficit borrowing; the two compete for capital and are likely to push the long end of the curve, especially ten-year bond yields, meaningfully higher.
10-year U.S. Treasury Yield HIGH
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This Bloomberg Markets video, published September 05, 2026, features Jonathan Golub discussing Fed Funds Rate, SPY, XLE, KBE, XLK, US Non-Tech Sectors, 10-year U.S. Treasury Yield. 7 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Jonathan Golub  · Tickers: Fed Funds Rate, SPY, XLE, KBE, XLK, US Non-Tech Sectors, 10-year U.S. Treasury Yield