U.S. stock markets reached new highs on Thursday as investors anticipated potential interest rate cuts from the Federal Reserve. The S&P 500 rose by 0.8%, surpassing its previous record set last week. The Dow Jones Industrial Average increased by 350 points, or 0.8%, while the Nasdaq composite gained 1%.
Treasury yields declined following reports that suggested a slowdown in the U.S. job market. One report indicated that private employers nearly halved their hiring in August compared to the previous month, and another showed an increase in unemployment benefit applications, suggesting more layoffs. Despite these signals, neither report indicated a recession was imminent.
A separate report on activity for businesses in the information and other services sectors showed stronger-than-expected growth.
The prospect of a slowing job market has raised expectations that the Federal Reserve could lower its main interest rate at its next meeting in a few weeks. Interest rate cuts are often seen as measures to stimulate economic growth but can also contribute to rising inflation.
The Federal Reserve has kept its main interest rate steady this year due to concerns about inflation, particularly related to President Donald Trump’s tariffs.
“The year started with strong job growth, but that momentum has been whipsawed by uncertainty,” said Nela Richardson, chief economist at ADP. She noted possible causes for the slowdown: “labor shortages, skittish consumers, and AI disruptions.”
A comprehensive jobs report from the U.S. Labor Department is expected Friday and may influence upcoming decisions by the Fed. In anticipation of this data, the yield on the 10-year Treasury fell from 4.22% late Wednesday to 4.16% Thursday.
Last month’s disappointing jobs report led to downward revisions for June and May figures and resulted in President Trump firing the head of the agency responsible for compiling employment data.
Among individual stocks, American Eagle Outfitters saw a 38% increase after posting profits more than double analysts’ estimates for its latest quarter, following heightened media attention over an advertising campaign featuring actor Sydney Sweeney.
Hewlett Packard Enterprise’s shares were up 1.5% after reporting better-than-expected profits.
T. Rowe Price climbed 5.8% following news that Goldman Sachs plans to buy up to $1 billion of T. Rowe Price stock—about 3.5% of all shares—as part of a partnership giving T. Rowe Price clients access to private markets expertise from Goldman Sachs. Shares of Goldman Sachs rose by 2.5%.
Salesforce declined by 4.9%, despite beating profit expectations; analysts attributed some gains to one-time factors.
C3.ai dropped 7.3% after reporting a larger loss than expected for the latest quarter and announcing Stephen Ehikian as its new chief executive officer.
Figma shares fell nearly 20%. While quarterly results met analyst forecasts and revenue projections were close to expectations, investor optimism had pushed Figma’s stock well above its July IPO price ahead of earnings.
At closing bell, the S&P 500 finished at 6,502.08 (up 53.82 points), the Dow at 45,621.29 (up 350 points), and Nasdaq at 21,707.69 (up nearly 210 points).
Internationally, stock indexes were mixed: Shanghai dropped by 1.3%, Hong Kong by 1.1%, while Tokyo jumped by 1.5%.
An earlier version of this story misstated that Goldman Sachs agreed to purchase $3.5 billion worth of T. Rowe Price stock; the correct figure is $1 billion.
