A rather disappointing jobs report is challenging Wall Street's optimism over looming rate cuts, as labor market weakness stirs fresh concerns about the economy.
Risk appetite returned to Wall Street on Thursday, as signs of labor market cooling in August cemented expectations that the Federal Reserve will begin cutting interest rates at its Sept. 17 meeting.
After a sharp decline in participation at the start of the week, market breadth metrics showed some recovery on September 3. However, the rebound lacked conviction, and many short-term indicators still signal a fragile underlying trend. Broader metrics remain stable, but caution is warranted.
Among the economic catalysts for Wednesday’s session will be the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey results for July and the Federal Reserve’s Beige Book report.
Wall Street stumbled on Tuesday, with broad losses by midday in New York as investors turned risk-off amid mounting concerns over lofty valuations, seasonal headwinds and fiscal strains.
Investor sentiment faded on Friday as a key inflation gauge closely watched by the Federal Reserve climbed to a five-month-high, casting fresh uncertainty over the timing of potential interest rate cuts.
Federal Reserve Governor Christopher Waller said late Thursday that the central bank should cut the Fed funds rate now, but suggested that he would rely on incoming data to decide the pace and magnitude of future rate reductions.
Wall Street traded cautiously on Wednesday, with major indices little changed at midday as investors awaited NVIDIA Corp.‘s (NASDAQ:NVDA) second-quarter earnings after the bell.
Investors are watching small caps heat up on an otherwise slow Tuesday morning, with the Russell 2000 climbing 1% and outpacing its larger peers, amid growing bets on a Fed rate cut next month.
Nvidia Corp. (NASDAQ:NVDA) is up 2% in midday trading Monday, moving within striking distance of its all-time high—now less than 2 percentage points away—as investors remain upbeat ahead of the company's highly anticipated
Powell’s dovish Jackson Hole remarks signal that the Fed could cut rates as early as September, with markets now pricing an 80% chance of a 25 bps cut.
Last week, the S&P 500 Index, a measure of broader market performance, slipped for five straight sessions before rebounding sharply on Friday after Fed Chair Jerome Powell signaled a possible interest rate cut.
