The S&P 500 Index ($SPX) (SPY) today is up by +0.17%, the Dow Jones Industrials Index ($DOWI) (DIA) is up by +0.08%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up by +0.14%. September E-mini S&P futures (ESU25) are up +0.19%, and September E-mini Nasdaq futures (NQU25) are up +0.13%.
Stock indexes are moving higher today as bond yields decline on expectations that the Fed will start cutting interest rates as soon as this month. Signs of a weaker US labor market are knocking bond yields lower and reinforcing speculation that the Fed will cut rates as soon as the September 16-17 FOMC meeting after today’s Aug ADP employment change rose less than expected and weekly jobless claims rose to a 10-week high. The 10-year T-note yield fell to a 4-month low of 4.17% today, and the swaps market shows the chances of a Fed rate cut this month rising to 99%.
Meanwhile, stocks are being undercut by weakness in chipmakers, led by a -5% fall in Texas Instruments after CFO Lizardi cautioned that the recovery in chip demand is not quite snapping back as some have hoped.
The Aug ADP employment change rose +54,000, weaker than expectations of +68,000.
US weekly initial unemployment claims rose by +8,000 to a 10-week high of 237,000, showing a weaker labor market than expectations of 230,000.
US Q2 nonfarm productivity was revised upward to +3.3% from the previously reported +2.4%, better than expectations of +2.7%. Q2 unit labor costs were revised downward to +1.0% from the previously reported +1.6%, weaker than expectations of +1.2%.
The remainder of this week’s US economic calendar is busy. Later today, the Aug ISM services index is expected to climb by +0.9 to 51.0. On Friday, Aug nonfarm payrolls are expected to rise by +75,000, and the Aug unemployment rate is expected to rise by 0.1 to 4.3%. Aug average hourly earnings are expected to increase +0.3% m/m and +3.7% y/y.
Regarding tariffs, a federal appeals court ruled late last Friday that President Trump exceeded his authority by imposing global tariffs without…
..
