Stocks closed mixed on Friday, with the Dow in the green, while the S&P and Nasdaq finished in the red. But the S&P and Nasdaq both closed higher for the week for the third week in a row. The Dow just missed the cut by 0.13%.

Strong earnings, once again, were a key driver of stocks last week.

But the main focus of Friday's session was the Employment Situation report. And it was a blowout number with 528,000 new jobs created last month (471,000 in the private sector and 57,000 in the public), vs. the consensus for 250,000 (220,000 in the private sector and 30,000 in the public). The unemployment rate dipped from 3.6% to 3.5%. Although, the participation rate slipped as well from 62.2% to 62.1%.

All in all, it was a solid report.

Although, I did notice that the amount of full-time jobs slipped by -71,000 in July, while the amount of part-time jobs rose by 384,000. And those with multiple jobs increased by 92,000, although the percentage of multiple jobholders in the workforce remained the same at 4.8% vs. June.

The industries with the largest job gains were: Leisure & Hospitality with 96,000 new jobs (with Food Services & Drinking Places accounting for 74,000 of that); Professional & Business Services increased by 89,000; Health Care rose by 70,000; Government jobs were up by 57,000 (with education making up 27,000 of that); Construction increased by 32,000; Manufacturing gained 30,000; Social Assistance jobs added 27,000; Retail Trade rose by 22,000; Transportation & Warehousing increased by 21,000; Information Services picked up 13,000; jobs in Financial Activities were up by 13,000 as well; and Mining was up by 7,000.

In spite of jobs being up, the narrative on why stocks put in a muted performance on Friday was that the much better than expected employment numbers suggests the economy remains strong, and thus, so will inflation, meaning the Fed may need to keep raising rates at the higher and faster pace it has set upon over the last two Fed meetings.

For example, prior to Friday's jobs report, traders had only placed a 34% chance that the Fed would raise rates by 75 basis points at their next meeting in September. But after the numbers came out, that soared to a 69.5% chance of a 75 bps rise, and a virtual certainty of at least 50 bps.

Some believe part of the recent rally in stocks was that the Fed might moderate their pace of hikes. But Friday's jobs report may have some rethinking that.

In the meantime, traders will be scrutinizing every economic report between now and September 20-21 (the next 2-day FOMC meeting), looking for any clues.

And the next big report that the market will be focused on is the Consumer Price Index (CPI) on Wednesday, August 10th, when we'll see if inflation has finally peaked or if it's still climbing.

Between the CPI report, digesting last week's jobs report, and this week's parade of more earnings (318 today / 1,743 in total thru Friday), it looks like it could be another busy week.

See you tomorrow,