U.S. stocks are rising to more records on expectations that the Federal Reserve will have to cut interest rates soon to help the economy
U.S. stocks are rising further into record heights on Friday after the latest disappointing signal on the job market bolstered expectations that the Federal Reserve will have to cut interest rates soon to help the economy.
The S & P 500 climbed 0.4% and added to its all-time high set the day before. The Dow Jones Industrial Average was up 115 points, or 0.3%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.6% higher.
The action was much stronger in the bond market, where Treasury yields tumbled after the report from the U.S. Labor Department said employers across the country hired far fewer workers in August than economists expected. The U.S. government also said that earlier estimates for June and July overstated hiring by 21,000 jobs.
The disappointing numbers followed last month’s weaker-than-expected update, along with other lackluster reports in the intervening weeks, and traders now are betting on a 100% probability that the Fed will cut its main interest rate at its next meeting on Sept. 17, according to data from CME Group. Such cuts can give a kickstart to the economy and job market, but the Fed has held off on them so far this year because they can also give inflation more fuel.
