Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., June 11, 2025.
Investors are heading into the August nonfarm payrolls report on Friday morning with stocks coming off of a fresh record. The S&P 500 closed at a new high on Thursday, thanks an afternoon boost in risk appetite.
Those market moves came despite weaker-than-expected ADP private payrolls data. Investors are hoping the reading will lend support to the Federal Reserve's case to go ahead with an expected rate cut at its September policy meeting. Fed funds futures trading is currently pricing in a 97% chance that benchmark interest rates will move lower when the central bank makes a decision on Sept.17, according to the CME Group's FedWatch tool.
But the Labor Department's nonfarm payrolls report on Friday will hold more sway than the reading on private payrolls.
"Tomorrow's jobs report will be the deciding factor, but so far this week the data is confirming a slowdown in the labor market," said Chris Larkin, managing director of trading and investing at E-Trade from Morgan Stanley. "In the short-term, markets may embrace that data because it should increase the odds of Fed rate cuts. But if the numbers deteriorate too much, it could raise concerns about the health of the economy."
Economists polled by Dow Jones forecast nonfarm payrolls to have expanded by 75,000 in August.
Stocks are on pace for a winning week. The S&P 500 has climbed 0.7%, while the technology-heavy Nasdaq Composite is registered a 1.2% gain. The 30-stock Dow has gained 0.2%.
Separately, Broadcom earnings could further bolster the artificial intelligence trade. The chipmaker's fiscal third-quarter revenue jumped 63% and it offered an upbeat forecast amid robust demand for its custom AI accelerators. Shares were up more than 3% in extended trading