Top 10 Stocks to Watch — Friday, August 7: The Hike Trade Just Broke

At 8:30 this morning the Bureau of Labor Statistics reported that the American economy lost 23,000 jobs in July. The street wanted somewhere between 80,000 and 97,500. June, first reported as a 57,000 gain, was revised down to 20,000. The unemployment rate fell to 4.1% from 4.2%, but for the wrong reason: the civilian labor force contracted by 264,000 and household-survey employment dropped 87,000. Participation slid to 61.4%, the lowest in more than five years. Average hourly earnings rose 0.1% against 0.3% expected.

That last number is the one that matters for your portfolio. Coming into this morning, fed funds futures priced roughly a 62% chance that the Federal Reserve would raise rates on September 16. Not cut. Raise. The July 29 FOMC held at 3.50% to 3.75% on a 9-3 vote with three dissents in favor of a hike, and the energy shock out of the Strait of Hormuz did the rest. A wage print of 0.1% takes the wage-spiral argument off the table. Within ten minutes of the release, October fed funds futures had repriced that September hike to roughly 40%.

Markets did what they always do when a tightening trade breaks. Two-year yields fell about nine basis points to 4.15%, the ten-year fell six to 4.61%, the dollar index dropped half a percent, and December gold added roughly $50 on the print to trade near $4,420. Nasdaq futures went from +0.60% to +0.83%. Bad news is good news, at least for the first hour.

That is the filter for today's list. A broken hike trade is a duration rally, which stacks a second tailwind on the high-multiple software names that reported last night and gives oxygen back to the capital-hungry stories punished all year. Four of the ten below gapped overnight on earnings; three have dated catalysts still ahead. Every price is pre-market, stamped between roughly 8:20 and 8:30 ET, and every one will have moved by the time you read this.

These are watch candidates, not recommendations. The levels below are scenarios to observe, not instructions to act on.

1. $TEAM — Atlassian

$146.85 pre-market, up 33.3% from Thursday's $110.17 close.

The largest verified move on the tape, and the cleanest fit with this morning's macro. Q4 FY26 revenue landed at $1.766 billion, up 28% against a $1.66 billion consensus, with cloud revenue at $1.213 billion and accelerating at 31%. Adjusted EPS of $1.87 crushed the $1.50 estimate. Bank of America upgraded the stock to Buy from Neutral and lifted its target to $175 from $105, arguing Atlassian is "an AI beneficiary rather than an AI victim." Co-CEO Mike Cannon-Brookes separately disclosed a 10b5-1 plan to buy up to $250 million of Class A stock in the open market.

The bear case sits in plain sight: FY27 revenue guidance of roughly $7.427 billion implies 13% growth, a sharp deceleration from 26% in FY26, with Data Center revenue guided to contract 17%. The market is paying for cloud acceleration and the earnings beat, not the headline top line. Even after a 33% gap the stock is down about 43% over the trailing year, against a 52-week range of $56.01 to $189.69.

Watch for: whether the gap holds. Fades on 30%-plus moves are common, and the honest question is whether buyers defend the low $140s once the momentum crowd is filled.

2. $NET — Cloudflare

$330.00 pre-market, up 16.0% from Thursday's $284.43 close.

Revenue of $696.1 million grew 36% and beat the $664.7 million consensus, but revenue is not why this stock is gapping. Cloudflare guided FY26 non-GAAP EPS to $1.25-$1.26 against a $0.96 consensus. That is not a beat-and-raise, it is a re-rating of the company's entire margin structure, and it arrived with Q3 guidance of $736-$737 million and $0.34 in EPS, both above the street. Current RPO grew 35%.

The technical situation is the interesting part. Cloudflare's 52-week high is $305.00. A $330 pre-market print puts the stock in blue sky, gapping above every prior resistance level it has, into a morning where falling yields are lifting exactly this kind of long-duration name.

Watch for: the $305 prior high. Whether that old ceiling converts to support on the first pullback is the tell into next week.

3. $RKLB — Rocket Lab

$78.66 pre-market, up 4.0% from Thursday's $75.67 close.

The forward-looking name here, and the only one with a company-confirmed date. Rocket Lab reports Q2 on Monday, August 10, after the close, with a 5:00 p.m. ET call. It goes in having booked $663 million of US Space Force work in nine days: a $397 million award on August 4 to build, launch and operate "Flatellites" for the Space-Based Airborne Moving Target Indicator program, and a $266 million award on July 27 covering 12 suborbital missile-defense launches with options for six more.

Here is the part the headlines skip. The larger award flies on Neutron, a rocket that has not launched yet, with a debut targeted for Q4 2026. Neither contract was filed on an 8-K; both rest on company press releases. The stock has run about 16.5% in four sessions into a print where management has to address that timeline directly, and shares remain roughly 48% below the $151.00 52-week high.

Watch for: Neutron schedule language on Monday's call. A firm Q4 date and a backlog number capturing both awards is one outcome; a slip is a very different one, and the stock has already priced a lot of optimism.

The rest of this briefing is for paid members: the seven remaining names, including the stock up 85% pre-market on revenue it did not actually book, the rare earth miner that just signed a defense offtake and launched a drone-industry program nobody is modeling, the nuclear developer that hit first criticality on Tuesday night and missed earnings this morning, and the short squeeze whose own guidance quietly tells you it has one quarter of runway.

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