New York , US
U.S. stock markets saw a significant recovery today, clawing back roughly half of the losses experienced during a steep sell-off on the previous Friday. The rally was driven by renewed optimism among investors for a potential interest rate cut by the Federal Reserve, following a disappointing jobs report last week.
The S&P 500 led the charge with its biggest single-day rally since May, gaining 1.5%. The Dow Jones Industrial Average and the Nasdaq Composite also saw strong gains, rising 1.3% and 2% respectively. The rebound was broad-based, with almost every major group in the S&P 500 advancing and over 85% of its companies closing higher for the day.
Friday’s weak jobs data, which showed that the U.S. economy added fewer jobs than expected and that unemployment rose, had initially spooked the market. However, investors are now viewing the slowdown as a signal that the Federal Reserve may be more inclined to ease its monetary policy. According to the CME FedWatch Tool, the probability of a September rate cut has surged to over 80%.
Technology mega-caps, which had borne the brunt of last week’s selling, were key drivers of the recovery. Companies like Nvidia and Meta Platforms climbed at least 3.5%, while Amazon and Alphabet also posted strong gains. The rebound comes as the second-quarter earnings season winds down, with S&P 500 companies on track to post an 8% earnings growth, a figure that is double the initial forecast.
While the rally has provided a much-needed boost to market sentiment, some analysts caution that volatility may continue. Concerns about the economic impact of new tariffs and ongoing trade policy uncertainty remain, and the market will be closely watching for further data on inflation and the labor market.
