The U.S. labor market continued its strength with steady job gains in July, which were enough to increase the chances of the Fed pulling its trigger on the first rate hike in almost a decade as early as next month. The Fed in its last FOMC meeting stated that it is on track to increase interest rates albeit at a slower pace if the job market shows further improvement. And this is exactly what happened (read: 5 ETFs Strategies to Prepare for Higher Rates).

The U.S. economy added 215,000 jobs in July driven by higher construction and manufacturing employment that more than offset the collapsing mining sector. Though the number was marginally below the market expectation of 225,000, unemployment remained steady at seven-year low of 5.3%.

Additionally, average hourly wages rose five cents to $24.99, bringing the year-over-year increase to 2.1%. Jobless claim were the lowest level since June 2008 at 10.4% against 10.5% in June. Further, the economy appears closer to full employment given that the number of full-time U.S. jobs as a share of total employment reached to 81.7%, marking the highest level since November 2008.

The decent job data suggests that the economy continued to gain momentum in July after growing 2.3% in the second quarter. To make the case for rates hike stronger, a surging service sector, increasing business activity, higher consumer spending, a recovering retail and housing market, and rising consumer confidence point to even strong economic growth that would translate into more jobs and the resultant higher rates.

ETFs to Watch

The news has extended the losing streak for the Dow Jones Industrial Average to the seventh day – the longest since August 2011. Additionally, the index is currently hovering at its six-month low. As a result, a few ETFs were severely impacted by the solid jobs data while a few are expected to gain in the weeks ahead (read: 4 Inverse ETFs That Soared Over 50% in July).

Below, we have highlighted some that are especially volatile post jobs data and increased chances of rates hike:

ETFs to Lose

SPDR Gold Trust ETF ((GLD – ETF report))

Gold will continue to remain under immense pressure as higher interest rates would diminish gold's attractiveness since the yellow metal does not pay interest like fixed-income assets and the product tracking this bullion like GLD will lose further. The fund tracks the price of gold bullion measured in U.S. dollars, and kept in London under the custody of HSBC Bank USA.