The S&P 500 closed at a new record high after a late-day surge lifted all three major indices. Traders looked past disappointing private employment data and instead leaned into the growing likelihood of a Federal Reserve rate cut this month.
The S&P 500 rose 0.83% to 6,502.08, marking its 21st record close of the year. The Nasdaq Composite added 0.98% to 21,707.69, while the Dow Jones Industrial Average advanced 350 points, or 0.77%, to 45,621.29.
Jobs data drives rate-cut bets
The ADP private payrolls report showed US employers added just 54,000 jobs in August, well short of the 75,000 economists had expected and down from 106,000 in July. Weekly jobless claims also rose, with 237,000 Americans filing for unemployment benefits last week.
Still, markets interpreted the softer-than-expected data as supportive for monetary easing. Futures trading now shows a 97% chance of a September 17 rate cut, according to CME Group’s FedWatch tool.
Bond yields and economic signals
US Treasury yields eased following the jobs data, providing relief to equities after a week of pressure from higher borrowing costs. The 30-year yield briefly topped 5% on Wednesday amid uncertainty over tariffs and the Fed’s independence.
Not all the numbers pointed to weakness. The ISM non-manufacturing index showed better-than-expected growth in services for August, a reminder that parts of the economy remain resilient.
Attention now turns to Friday’s nonfarm payrolls report, expected to show 75,000 jobs added in August. Analysts say a figure in line with forecasts could lock in a rate cut, but too much weakness could reignite recession fears.
Movers in focus
Amazon was among the biggest winners, climbing more than 4% on optimism around its partnership with artificial-intelligence firm Anthropic. American Eagle Outfitters soared 35% after reporting profits twice as strong as analysts had forecast, boosted in part by a controversial campaign starring actress Sydney Sweeney. T. Rowe Price gained nearly 6% after Goldman Sachs agreed to buy up to US$3.5bn of its stock.
Local outlook
Australian shares are set to open higher, with futures up 50 points, or 0.6%, to 8,866. The Australian dollar slipped 0.5% to 65.10 US cents.
Elsewhere, Bitcoin fell 2.3% to US$109,846, gold eased 0.4% to US$3,544 an ounce, Brent crude dipped 0.9% to US$67.01 a barrel, while iron ore rose 1.5% to US$104.80 a tonne.
The main focus for markets now: Friday’s jobs report, expected to be the weakest since 2020.
