Major United States benchmark averages closed higher on Thursday (Friday AEST), with the S&P 500 refreshing record highs amid optimism over Federal Reserve rate cuts ahead of Friday’s crucial jobs report.
The Dow Jones Industrial Average climbed 350.1 points or 0.8% to 45,621.3. The S&P 500 gained 53.8 points or 0.8% to finish at 6,502.1, marking its 21st record close this year. The Nasdaq Composite advanced 210.0 points or 1% to 21,707.7.
Amazon helped fuel the rally, with its shares surging 4.3% on renewed investor enthusiasm about its partnership with artificial intelligence firm Anthropic.
Earlier in the day, the ADP private payrolls report showed U.S. companies added just 54,000 jobs in August, well below market expectations of 65,000 and down from July’s revised 106,000.
The weaker data reinforced bets that the Fed could cut rates in September, without stoking immediate fears of a recession.
The CME Group FedWatch Tool reflected a 97% probability of a September rate cut following the ADP release.
U.S. Treasury yields also retreated, easing a headwind for equities. The 30-year yield had briefly topped 5% earlier in the week, pressuring markets amid renewed concerns over President Donald Trump’s tariffs and debate about the Fed’s independence.
Yields on 10-year and 2-year U.S. Treasury bonds fell 1% and 0.8% to 4.852% and 3.592%, respectively.
Adding to signs of a cooling labour market, weekly jobless claims rose to 237,000 for the period ended 30 August, up 8,000 from the prior week and slightly above forecasts of 230,000.
However, the ISM Services PMI delivered a slightly stronger-than-expected reading, pointing to resilience in the services sector.
Markets now await the official August nonfarm payrolls report, due Friday. Markets expect the U.S. economy to have added 75,000 jobs last month.
Investors are hoping for a figure that is weak enough to bolster the Fed’s case for rate cuts, but not so soft that it raises alarm over a potential recession.
