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2w ago

Equities Rally on Surge in Fed Rate-Cut Bets After Jobs Data Shake-Up

Disappointing payrolls drove a surge in Fed rate-cut odds that propelled markets to recover losses.

Women holding umbrellas stand in front of a stock quotation board outside a brokerage in Tokyo, Japan June 30, 2025. REUTERS/Issei Kato/File Photo
An eagle tops the U.S. Federal Reserve building's facade in Washington, July 31, 2013. REUTERS/Jonathan Ernst/File Photo
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Overview

  • Weak July nonfarm payrolls and steep May-June revisions fuel data credibility concerns after President Trump fired the BLS head and threatened higher tariffs.
  • CME FedWatch now assigns about a 94% probability to a September Federal Reserve rate cut as markets sharply repriced policy for easing.
  • U.S. stocks rebounded strongly on Monday, with the S&P 500 up 1.5%, the Dow gained 585 points (1.3%), and the Nasdaq climbed 2% as dip-buying returned.
  • Asia-Pacific markets extended the rally, led by South Korea’s KOSPI, which added 0.91% on bargain hunting and anticipations of U.S. rate cuts.
  • Treasury yields plunged—two-year notes dropped nearly 25 basis points for the biggest one-day move since last August—and Idexx Laboratories shares surged 27.5% on better-than-expected earnings and an upgraded outlook.