A weaker-than-expected jobs report for July ignited a market selloff (^DJI, ^IXIC, ^GSPC). Signs of a cooling labor market fueling concerns the Fed's "higher for longer" interest rate stance might end in recession. However, UBS Global Wealth Management Head of Asset Allocation Americas Jason Draho says however that a “recession risk is unlikely.”

He says that consumer remains in "good shape" and that even though "job growth has moderated" there hasn't been a significant uptick in initial claims.

Draho is also seeing improvement in the risk-reward for the S&P 500 and tech sector despite the negative market reaction to the latest labor market data. As for the near term, Darho says market's likely to remain volatile given investor concerns about the Fed being behind the curve and growth slowing.

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This post was written by Ivana Freitas