U.S. stocks closed higher on Thursday as fresh labor market data reinforced expectations of an imminent interest rate cut by the Federal Reserve, with major technology names helping drive market momentum.
The Dow Jones Industrial Average rose 325.18 points, or 0.72%, to 45,596.41, while the S&P 500 gained 36.04 points, or 0.56%, to 6,484.30. The tech-heavy Nasdaq Composite added 124.88 points, or 0.58%, to 21,622.61.
Broadcom, considered a key player in artificial intelligence, gained 1.2% ahead of its quarterly earnings release after the bell. Amazon shares jumped more than 3%, while Meta Platforms advanced over 1%, boosting sentiment in the technology sector.
Labor data released earlier in the day showed that jobless claims rose more than expected last week and private payroll growth slowed in August, signs of a cooling labor market. However, investors appeared unfazed, with markets placing a 95% probability on a 25 basis-point rate cut this month, according to CME’s FedWatch Tool.
“The labor market data we’re going to get – payrolls – tomorrow I don’t see really changing anything significantly because 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.
Despite the optimism, gains were capped by a 5.2% decline in Salesforce shares after the software giant forecast third-quarter revenue below Wall Street estimates, raising concerns over weak monetization of its AI agent platform.
Meanwhile, American Eagle Outfitters surged after projecting third-quarter comparable sales above expectations, while broader market breadth remained positive with advancing issues outpacing decliners on both the NYSE and Nasdaq.
September has historically been a difficult month for equities, with the S&P 500 averaging a 1.5% decline since 2000, according to LSEG data. Still, with the Fed widely expected to ease policy, investors appear willing to bet on a supportive environment for risk assets.
WHAT YOU SHOULD KNOW
Wall Street ended higher on Thursday as investors bet on a near-certain Fed rate cut this month, with gains in big tech stocks offsetting weak labor data and Salesforce’s disappointing forecast.
