The three major U.S. stock indexes ended solidly higher on Thursday as labor market data did not change expectations for an interest rate cut by the Federal Reserve this month and investors awaited Friday’s U.S. monthly jobs report.
Shares of chip company Broadcom, considered a major artificial intelligence player, closed higher ahead of its quarterly results, due after the closing bell.
Also helping the market were gains in shares of Amazon.com and Meta Platforms.
Data earlier showed that the number of Americans filing new applications for unemployment benefits increased more than expected last week, while hiring by private employers slowed in August, further evidence that labor market conditions were softening.
But investors are especially keen to see the U.S. monthly jobs report due on Friday.
“The labor market data we’re going to get — payrolls — tomorrow I don’t see really changing anything significantly because (Fed Chair Jerome) Powell has effectively already told us we’re getting a cut unless it’s really, really out of bounds,” said Mike Dickson, head of research and quantitative strategies at Horizon Investments in Charlotte, North Carolina.
According to preliminary data, the S&P 500 gained 53.48 points, or 0.82%, to end at 6,501.21 points, while the Nasdaq Composite gained 207.26 points, or 0.96%, to 21,704.99. The Dow Jones Industrial Average rose 348.71 points, or 0.77%, to 45,619.94.
Investors are pricing in a 95% probability of a 25 basis-point cut, CME’s FedWatch Tool showed. The move was largely expected after July’s bleak payrolls figures and Powell’s dovish comments.
Limiting some of the day’s gains, Salesforce shares fell after the company forecast third-quarter revenue below Wall Street estimates on Wednesday, signaling lagging monetization for its AI agent platform.
September is historically a weak month for stocks, with the S&P 500 losing 1.5% on average since 2000, according to LSEG data.
Among other gainers, American Eagle Outfitters shares jumped after the apparel company forecast third-quarter comparable sales above estimates on Wednesday.