NEW YORK, Aug 4 (Reuters) – Major U.S. stock indexes rose 1% on Monday as investors sought bargains after the previous session’s selloff and increased bets for a September rate cut in the wake of Friday’s weaker-than-expected jobs data.
Tesla (TSLA.O)
, opens new tab shares rose 2.1% after the electric vehicle maker granted CEO Elon Musk 96 million shares worth about $29 billion.
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Odds for a September rate cut now stand at about 84%, according to CME Fedwatch. Market participants see at least two quarter-point cuts by the end of this year.
Friday’s bleak July jobs data also accompanied steep downward revisions for May and June.
“Today is just a little bit of dip-buying. It does show a pretty healthy sign of folks out there looking for an opportunity to get in,” said Mike Dickson, head of research and quantitative strategies at Horizon Investments in Charlotte, North Carolina.
“It’s a little concerning in the sense the labor market … definitely appears to be weaker than people expected. A bit of an offset to that is the renewed rate cut expectations. There’s a high probability we’re getting a September cut.”
The S&P 500 and Nasdaq had hit a string of record highs recently. The S&P 500 is now up about 7.5% for the year to date.
The Dow Jones Industrial Average (.DJI)
, opens new tab rose 489.91 points, or 1.12%, to 44,078.39, the S&P 500 (.SPX)
, opens new tab gained 81.33 points, or 1.30%, at 6,319.34 and the Nasdaq Composite (.IXIC)
, opens new tab climbed 377.21 points, or 1.83%, to 21,027.34.
Investors were still digesting Trump’s firing of the Bureau of Labor Statistics Commissioner Erika McEntarfer on Friday, accusing her of faking the weak jobs numbers.
Also on Friday, Fed Governor Adriana Kugler unexpectedly resigned, which could open the door for U.S. President Donald Trump to reshuffle the central bank’s leadership in his favor.
Trump has been pushing the Fed to cut rates.
Among rising shares, Spotify (SPOT.N)
, opens new tab gained 6% as the music streaming platform announced plans to raise the monthly price of its premium individual subscription in select markets from September.
Joby Aviation (JOBY.N)
, opens new tab jumped 21% after Bloomberg News reported that the company was exploring the acquisition of helicopter ride-share operator Blade Air Mobility (BLDE.O)
, opens new tab. Blade Air’s shares surged 22%.
Advancing issues outnumbered decliners by a 4.23-to-1 ratio on the NYSE. There were 103 new highs and 45 new lows on the NYSE.
On the Nasdaq, 3,322 stocks rose and 1,126 fell as advancers outnumbered decliners by a 2.95-to-1 ratio.
Reporting by Caroline Valetkevitch; Additional reporting by Nikhil Sharma and Pranav Kashyap in Bengaluru; Editing by Maju Samuel and Richard Chang
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