NEW YORK, Aug 4 (Reuters) – All three major U.S. stock indexes ended more than 1% higher 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 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.
According to preliminary data, the S&P 500 (.SPX)
, opens new tab gained 92.06 points, or 1.48%, to end at 6,330.07 points, while the Nasdaq Composite (.IXIC)
, opens new tab gained 400.43 points, or 1.94%, to 21,050.56. The Dow Jones Industrial Average (.DJI)
, opens new tab rose 588.78 points, or 1.35%, to 44,177.36.
Investors were still digesting U.S. President Donald Trump’s firing of 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 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 after the company said it will acquire helicopter ride-share company Blade Air Mobility’s (BLDE.O)
, opens new tab passenger business for up to $125 million.
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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