Investors boosted equities on both sides of the border as weak payrolls strengthened rate cut bets
Markets on both sides of the border surged Thursday as weaker labour data bolstered expectations that central banks may move to cut rates in the coming weeks.
According to CNBC, the S&P 500 closed at a record 6,502.08, up 0.83 percent, marking its 21st record close this year. The Nasdaq Composite gained 0.98 percent to 21,707.69, while the Dow Jones Industrial Average climbed 350.06 points, or 0.77 percent, to 45,621.29.
As reported by BNN Bloomberg, the S&P/TSX composite index rose 164.53 points to 28,915.89.
The US ADP private payrolls report showed job gains of 54,000 in August, well below economist expectations of 75,000 and down from July’s revised 106,000.
CNBC reported that traders viewed the weak figures as sufficient to strengthen the case for a Federal Reserve rate cut without signalling an imminent recession.
CME Group’s FedWatch tool showed a 97 percent probability of a cut at the September 17 meeting.
Jamie Cox, managing partner at Harris Financial Group, said the ADP data “reinforce the narrative that the rate of positive change in the labor market has slowed significantly.”
US Treasury yields retreated after the data, easing market pressure following a sharp rise earlier in the week when the 30-year yield briefly surpassed 5 percent amid concerns over US President Donald Trump’s tariffs and the Fed’s independence.
Additional reports added to signs of labour market weakness.
CNBC noted that weekly jobless claims rose to 237,000, above expectations and up 8,000 from the previous week.
However, the ISM non-manufacturing PMI exceeded forecasts, indicating continued strength in the services sector.
Friday’s nonfarm payrolls report is now in focus, with economists polled by Dow Jones forecasting 75,000 jobs added in August.
BNN Bloomberg reported that Statistics Canada will also release its August labour force survey, with a Reuters poll calling for a 10,000-job gain and unemployment rising to 7 percent from July’s 6.9 percent.
On the Canadian trade front, StatCan reported a merchandise trade deficit of $4.9bn in July, narrowing from a revised $6bn in June.
Michael Currie, senior investment adviser at TD Wealth, said the results were “nothing really coming out of Canada that’s disastrous” but not enough to shift the Bank of Canada away from expected rate cuts.
Corporate performance also influenced trading.
Amazon shares rose more than 4 percent on enthusiasm around its partnership with Anthropic.
Shopify gained 3.8 percent, lifting the TSX technology subindex by over 2 percent.
In the US, American Eagle Outfitters surged 38 percent after reporting profits more than double analyst forecasts, while Salesforce slumped almost 5 percent on disappointing AI metrics despite a solid earnings headline.
The Canadian dollar ended the day at 72.31 cents US compared with 72.50 cents US on Wednesday.
BNN Bloomberg reported that October crude futures fell 49 cents US to US$63.48 per barrel, while December gold slipped US$28.80 to US$3,606.70 an ounce.
