US Stocks Climb Ahead of Key Jobs Data This Week: Markets Wrap

Stocks rose on Monday with traders awaiting labor-market data this week that could reinforce bets about the Federal Reserve’s path of interest-rate cuts.

The S&P 500 climbed 0.4%, extending this month’s rally. Gold hit a record, lifting the US Treasury’s holdings of the metal past $1 trillion. The Bloomberg dollar index dropped for a second consecutive session. Treasury yields fell across the curve, with the 10-year rate around 4.16%.

All eyes will be on Friday’s nonfarm payrolls report for further details on how the labor market is holding up, which would help the Fed decide how many more times to cut rates this year. Markets are currently pricing in two rate cuts by January, given recent signs that the jobs market is slowing. This week, there’s also concern that the threat of a US government shutdown with an impasse in the Congress could delay some data releases.

“Fed Chair Jerome Powell indicated that markets could expect two more cuts this calendar year – but that this was not a certainty,” Emma Wall, chief investment strategist at Hargreaves Lansdown, wrote. “A strong jobs market, and stubborn inflation would suggest the Fed instead holds rates where they are, with a likely weighting toward jobs data in decision making.”

Wall added that investors should be mindful that the inflationary impact of tariffs is not properly seen in numbers just yet.

“Further tax hikes — such as the 100% pharmaceuticals levy announced last week — are likely to add pricing pressures,” she said.

Apart from Friday’s jobs report, there’s also the JOLTs report releasing on Tuesday that will offer a picture on job openings while Wednesday’s data will shed light on company hiring. Strategists said the recent negative revisions and downtrend in jobs numbers will raise the stakes for Friday’s release.

“We could be set for some notable volatility around these prints going forward as the breakeven payroll rate now seems to be around or under 50,000 a month,” wrote Jim Reid, global head of macro research and thematic strategy at Deutsche Bank AG. “We are not really conditioned to negative prints being within that margin of error, so reactions to such prints may be not rational.”

Fed policymakers including Alberto Musalem and Raphael Bostic are speaking on Monday.

Equities investors have recently been worried about valuations being too high, prompting them to ditch stocks for a few sessions last week. But a growing number of Wall Street analysts are now advising that it may be time to forget what you thought you knew about price-to-earnings ratios, as the average multiple has steadily jumped higher over the course of decades.

“There’s something weird going on with valuations from what they used to be — that is, there’s an upward trend in the valuation range,” said Jim Paulsen, who now writes a Substack newsletter called Paulsen Perspectives.

Global stocks are poised to extend their rally through year-end, driven by a resilient US economy, supportive valuations and a more dovish Fed stance, according to Goldman Sachs Group Inc. strategists.

“Good earnings growth, Fed easing without a recession and global fiscal policy easing will continue to support equities,” a team led by Christian Mueller-Glissmann wrote in a note. “With anchored recession risk, we would buy dips in equities into year-end.”

In company news, Electronic Arts Inc. agreed to sell to a group of private investors in a deal that values the company at $55 billion, the largest leveraged buyout on record. Huawei Technologies Co. is preparing to sharply ramp up production of its most advanced artificial intelligence chips over the next year.

Top congressional leaders will meet with President Donald Trump at the White House a day before federal funding would expire if the two parties can’t agree on a short-term spending bill. The bill would only fund the government until mid-November and must pass before Oct. 1.

Still, it’s unclear what the impact on markets will be.

"It seems like investors have become indifferent to that possibility as it has not been something that has had a lasting impact on the economy or the markets in the past,” Matt Maley, chief market strategist at Miller Tabak, said of the possibility of a government shutdown. “So, it’s hard to think that it will have a major impact on the markets."

Some of the main moves in markets: 

Stocks

• The S&P 500 rose 0.4% as of 9:30 a.m. New York time

• The Nasdaq 100 rose 0.6%

• The Dow Jones Industrial Average rose 0.2%

• The Stoxx Europe 600 was little changed

• The MSCI World Index rose 0.4%

Currencies

• The Bloomberg Dollar Spot Index fell 0.3%

• The euro rose 0.4% to $1.1744

• The British pound rose 0.3% to $1.3446

• The Japanese yen rose 0.5% to 148.67 per dollar

Cryptocurrencies

• Bitcoin rose 1.2% to $112,217.39

• Ether rose 1.4% to $4,111.08

Bonds

• The yield on 10-year Treasuries declined one basis point to 4.16%

• Germany’s 10-year yield declined one basis point to 2.73%

• Britain’s 10-year yield declined two basis points to 4.72%

Commodities

• West Texas Intermediate crude fell 2.6% to $64.04 a barrel

• Spot gold rose 1.6% to $3,821.73 an ounce

This story was produced with the assistance of Bloomberg Automation.