Nasdaq Climbs as Pigma Slides and Fed Rate Cut Odds Soar

 StocksRunner
 
  StocksRunner
 
Follow  Message
 
 
 
Find out what happening right now and get all the pieces of the puzzle on important data activity before the major news sources break the story and see what are the trends
 

•  04 Sep 2025
 

The probability that the Federal Reserve will cut interest rates on the seventeenth of the month has surged to 97% after the ADP report indicated an addition of only 54 thousand jobs in August, below the expected 73 thousand and a decline from 106 thousand in the previous report. Despite this, Wall Street opened steady as investors eagerly await tomorrow’s employment report.

Investors focused on the slowdown in the labor market, which has raised expectations for an imminent interest rate cut. The S&P is trading nearly unchanged, while the Nasdaq is up modestly. The Dow, meanwhile, is flat, largely due to a roughly 5% drop in Salesforce (CRM) shares following a disappointing revenue forecast.

The ADP private employment report stood out as the key data point influencing the market. It showed that only 54 thousand jobs were added in August, far below the expected 75 thousand and lower than July’s revised figure of 106 thousand. New unemployment claims also rose to 237 thousand, an increase of 8,000 from the previous week, signaling a further slowdown in the U.S. labor market. This raises questions about how the data will influence upcoming interest rate decisions.

Investors now believe the data is weak enough to encourage the Federal Reserve to cut rates at the upcoming September decision, though perhaps not so weak as to signal a recession. The probability of a rate cut this month has risen to 97.6%, up from 96.6% yesterday.

Yesterday trading ended with mixed results. The Nasdaq and the S&P 500 rose, supported by technology stocks such as Google and Apple, which benefited from a legal decision removing the threat of a regulatory breakup. Conversely, the Dow Jones Industrial Average, which is more heavily weighted toward industrial and consumer stocks, fell slightly, highlighting the divergence between sectors.

Ahead of Friday employment report, economists note that some Fed officials remain cautious. While they recognize the labor market slowdown, they also point out that the participation rate has declined, which mitigates the impact. Additionally, some are hesitant to cut interest rates sharply amid moderate inflation. However, board members such as Christopher Waller advocate starting a series of cuts immediately, arguing that the discussion should focus on the pace rather than the need for reductions.

View All Headlines