U.S. stock markets climbed to a record high on Thursday as investors made final adjustments ahead of a crucial update on the job market. The S&P 500 gained 0.8% to set a new all-time high, while the Dow Jones Industrial Average and the Nasdaq composite also rose 0.8% and 1%, respectively. The rally was fueled by easing pressure in the bond market, where Treasury yields fell following new economic data.
The positive market movement was driven by reports suggesting a cooling labor market, which investors believe could prompt the Federal Reserve to cut interest rates. Data showed that private employers nearly halved their hiring in August and more workers applied for unemployment benefits. While not indicating a recession, this slowdown could push the Fed to cut rates for the first time this year at its upcoming meeting, a move that typically stimulates the economy and boosts stock prices.
Several individual stocks saw significant movement following earnings reports. American Eagle Outfitters surged 38% after reporting profits more than double analyst expectations, partly fueled by a viral advertising campaign. Hewlett Packard Enterprise and T. Rowe Price also gained on strong results. Conversely, Salesforce slumped 4.9% despite beating profit forecasts, as analysts questioned the sustainability of its performance, and AI company C3.ai fell 7.3% after reporting a larger-than-expected loss.
The market’s focus now shifts to the comprehensive jobs report from the U.S. Labor Department due on Friday, which will heavily influence the Fed’s decision on interest rates. This report carries added weight following last month’s grim data, which led to massive revisions and political fallout. The outcome will determine whether the recent market optimism about rate cuts is justified or if concerns over a slowing economy will take precedence.
