Stocks Rise Before the Open as Fed Rate-Cut Bets Grow, U.S. ADP Jobs Report in Focus

September S&P 500 E-Mini futures (ESU25) are up +0.19%, and September Nasdaq 100 E-Mini futures (NQU25) are up +0.33% this morning as Treasury yields extended their decline after the latest jobs report made it all but certain that the Federal Reserve will cut interest rates this month.

Investors now await a fresh batch of U.S. economic data, comments from Fed officials, and an earnings report from semiconductor and software giant Broadcom.

In yesterday’s trading session, Wall Street’s major indexes ended mixed. Alphabet (GOOGL) jumped over +9% and was the top percentage gainer on the S&P 500 and Nasdaq 100 after a judge ruled in an antitrust case that Google won’t be forced to sell its Chrome browser. Also, Apple (AAPL) rose more than +3% and was the top percentage gainer on the Dow after a court ruling allowed Alphabet to maintain an agreement under which Google pays Apple more than $20 billion annually to remain the default search engine on the Safari browser. In addition, The Campbell’s Company (CPB) climbed over +7% after the packaged food maker posted better-than-expected FQ4 adjusted EPS. On the bearish side, Dollar Tree (DLTR) slumped more than -8% and was the top percentage loser on the S&P 500 after the discount retailer issued disappointing Q3 guidance.

A Labor Department report released on Wednesday showed that U.S. JOLTs job openings fell to a 10-month low of 7.181 million in July, weaker than expectations of 7.380 million. Also, U.S. factory orders fell -1.3% m/m in July, in line with expectations.

“[The JOLTs report] does confirm the slowing pace of hirings being seen in a variety of stats in the aggregate, but something we’re well aware of — and why the Fed is cutting rates by 25 basis points in two weeks,” said Peter Boockvar at The Boock Report.

Fed Governor Christopher Waller said on Wednesday that the central bank should start cutting interest rates this month and proceed with multiple reductions in the months ahead, noting that officials may debate the exact pace of easing. Also, Minneapolis Fed President Neel Kashkari said, “Inflation is still too high, but at the same time, the labor market is showing some signs of cooling, so it’s, we’re getting into a tricky position now for the Fed.” At the same time, St. Louis Fed President Alberto Musalem said, “The current modestly restrictive setting of the policy rate is consistent with today’s full-employment labor market and core inflation nearly one percentage point above the Fed’s 2% target.” In addition, Atlanta Fed President Raphael Bostic reiterated that he views one rate cut as appropriate for this year, though he noted that could change depending on the trajectory of inflation and the labor market.

U.S. rate futures have priced in a 97.6% chance of a 25 basis point rate cut and a 2.4% chance of no rate change at the Fed’s monetary policy committee meeting later this month.

Meanwhile, the Fed said Wednesday in its Beige Book survey of regional business contacts that U.S. economic activity showed “little or no change” in recent weeks. “Across districts, contacts reported flat to declining consumer spending because, for many households, wages were failing to keep up with rising prices,” according to the Beige Book. The report also said that every region reported price increases, with 10 of the 12 citing “moderate or modest” inflation and two noting “strong input price growth.” “Nearly all districts noted tariff-related price increases, with contacts from many districts reporting that tariffs were especially impactful on the prices of inputs,” according to the report.

Today, investors will monitor earnings reports from several high-profile companies, with Broadcom (AVGO), Copart (CPRT), Lululemon Athletica (LULU), and Samsara (IOT) set to release their quarterly results.

On the economic data front, investors will focus on the U.S. ADP Nonfarm Employment Change data, which is set to be released in a couple of hours. Economists, on average, forecast that the August ADP Nonfarm Employment Change will stand at 73K, compared to the July figure of 104K.

The U.S. ISM Non-Manufacturing PMI and S&P Global Services PMI will also be closely monitored today. Economists expect the August ISM services index to be 50.9 and the S&P Global services PMI to be 55.3, compared to the previous values of 50.1 and 55.7, respectively.

U.S. Unit Labor Costs and Nonfarm Productivity data will be released today. Economists forecast final Q2 Unit Labor Costs to rise +1.2% q/q and Nonfarm Productivity to rise +2.8% q/q, compared to the first-quarter numbers of +6.9% q/q and -1.8% q/q, respectively.

U.S. Trade Balance data will come in today. Economists anticipate the trade deficit will widen to -$77.70 billion in July from -$60.20 billion in June.

U.S. Initial Jobless Claims data will be released today as well. Economists expect this figure to be 230K, compared to last week’s number of 229K.

In addition, market participants will be anticipating speeches from New York Fed President John Williams and Chicago Fed President Austan Goolsbee.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.193%, down -0.43%.

The Euro Stoxx 50 Index is down -0.04% this morning, steadying after turbulence earlier this week sparked by a global bond selloff. Travel and defense stocks underperformed on Thursday. Data from Eurostat released on Thursday showed that Eurozone monthly retail sales fell more than expected in July, dampening hopes of a consumer-led recovery in an economy also struggling with weakening external demand. Meanwhile, Germany’s Ifo institute on Thursday lowered its 2025 economic growth forecast for Germany to 0.2% from 0.3%, warning that without credible pro-growth measures, Europe’s largest economy risks further years of stagnation. U.S. tariffs are continuing to weigh heavily on the German economy, said Timo Wollmershaeuser, head of forecasts at Ifo. Investors remain focused on upcoming U.S. jobs data to assess the Fed’s next move, with a rate cut this month now nearly fully priced in. In corporate news, Jet2 Plc (JET2.LN) plunged over -14% after the British budget airline cautioned that full-year profits would come in at the lower end of guidance as customers cut back on holidays.

Eurozone’s Retail Sales data was released today.

Eurozone’s July Retail Sales fell -0.5% m/m and rose +2.2% y/y, weaker than expectations of -0.3% m/m and +2.4% y/y.

Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed down -1.25%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +1.53%.

China’s Shanghai Composite Index closed sharply lower today, falling for a third straight session as investors continued to take profit after the recent rally. Technology stocks, a cornerstone of China’s bull run, tumbled on Thursday, with AI chip giant Cambricon dropping more than -14%. The selloff followed a Bloomberg report that China’s financial regulators are weighing several measures to cool the stock market as concerns mount over the pace of the recent rally. The measures include lifting certain short-selling restrictions, according to the report. Zhao Jian, head of Atlantis Finance Research Institute, said, “From a technical perspective, there is a strong need for profit-taking, and today’s Bloomberg report has accelerated investor exits.” The end of China’s largest military parade on Wednesday also contributed to profit-taking. Investors had widely anticipated that authorities would work to maintain market stability ahead of the event. Meanwhile, China’s commerce ministry said in a statement just before midnight on Wednesday that the country will impose tariffs of up to 78.2% on certain U.S. optical fiber imports starting September 4th, accusing American producers of evading anti-dumping measures. In corporate news, BYD fell about -3% after Reuters reported that the EV giant cut its annual sales target by up to 16% to 4.6 million vehicles as red-hot growth begins to cool.

Japan’s Nikkei 225 Stock Index ended higher today, rebounding from a nearly one-month low, supported by a pause in the surge in global bond yields and a tech-led rally on Wall Street overnight. Bank stocks, which plunged on Wednesday on concerns that Prime Minister Shigeru Ishiba’s fragile grip on power might delay the Bank of Japan’s next rate hike, led the gains on Thursday. Technology stocks also advanced, tracking overnight gains among their U.S. peers. Meanwhile, bond yields in Japan retreated on Thursday after climbing the previous day, helping to ease investor concerns. Japan’s bond yields extended their decline after a closely watched auction of 30-year government notes drew demand broadly in line with its 12-month average. In other news, foreign investors offloaded Japanese stocks for the second consecutive week through August 30th, reflecting caution as U.S. President Donald Trump sought to oust Fed Governor Lisa Cook. Foreigners sold a net 785.7 billion yen ($5.33 billion) worth of Japanese stocks, according to data from Japan’s Ministry of Finance. In corporate news, Nidec Corp. tumbled more than -22% after the electric motor manufacturer found evidence suggesting that executives may have been involved in improper accounting. Investor attention now turns to Friday’s wage data for further monetary policy clues. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -3.44% to 23.87.

Pre-Market U.S. Stock Movers

American Eagle Outfitters (AEO) jumped more than +24% in pre-market trading after the apparel retailer reported better-than-expected Q2 results and reinstated its full-year guidance.

Asana (ASAN) climbed over +7% in pre-market trading after the company posted upbeat Q2 results and raised its full-year guidance.

Hewlett Packard Enterprise (HPE) rose more than +3% in pre-market trading after the server and cloud-software company reported stronger-than-expected FQ3 results and boosted its annual guidance.

Salesforce (CRM) slumped over -6% in pre-market trading after the cloud software company provided disappointing Q3 guidance.

Figma (FIG) plunged more than -15% in pre-market trading after the design-software company posted weaker-than-expected Q2 EPS.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Thursday - September 4th

Broadcom (AVGO), Copart (CPRT), Lululemon Athletica (LULU), Samsara (IOT), Guidewire (GWRE), DocuSign (DOCU), Ciena Corp (CIEN), ServiceTitan (TTAN), Toro (TTC), UiPath (PATH), Science Applications (SAIC), Brady (BRC), Argan (AGX), Braze (BRZE), John Wiley&Sons (WLY), Phreesia (PHR), G-III Apparel (GIII), Endava (DAVA), Cango (CANG), Shoe Carnival (SCVL), Caleres (CAL).