{"id":28220,"date":"2025-08-05T08:05:03","date_gmt":"2025-08-05T08:05:03","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=28220"},"modified":"2025-08-05T08:05:03","modified_gmt":"2025-08-05T08:05:03","slug":"sp-500-surges-on-rate-cut-hopes","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-ca\/analysis\/sp-500-surges-on-rate-cut-hopes\/","title":{"rendered":"S&P 500 Surges on Rate Cut Hopes"},"content":{"rendered":"\n
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The S&P 500<\/a> climbed 1.5% on Monday as traders aggressively bought stocks. The rally ignited after a government report showed slowing job growth, which traders believe will prompt the US Federal Reserve to lower interest rates next month.<\/p>\n\n\n\n

The broad market index\u2019s strong performance led the charge. The Dow Jones Industrial Average added 585 points for a 1.3% gain, while the technology-heavy Nasdaq Composite rose 2%. <\/p>\n\n\n\n

Small-cap stocks also advanced, a development that suggests broadening market participation. This unified rally showed traders quickly shook off the shock from Friday\u2019s employment data.<\/p>\n\n\n\n

Markets Reprice Fed Action<\/h2>\n\n\n\n

Traders have aggressively repriced their expectations for a Federal Reserve interest rate cut. The catalyst was likely Friday’s Non-Farm Payrolls report which showed that economy added only 73,000 jobs, a figure well below forecasts. It also included large downward revisions to the job numbers for May and June.<\/p>\n\n\n\n

In response, futures markets<\/a> now imply a 92.1% probability of a rate reduction in September. This is a steep climb from the 38% chance priced in before the report. <\/p>\n\n\n\n

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Fed Fund Futures

– Market now fully pricing in a rate cut in Sept (96% chance) pic.twitter.com\/EBDdO2P51F<\/a><\/p>— Christian Fromhertz \ud83c\uddfa\ud83c\uddf8 (@cfromhertz) August 4, 2025<\/a><\/blockquote>