Can weak payrolls actually be good news on Wall Street? Investors appear convinced. Markets are rallying ahead of the official August jobs report, betting that a labor slowdown is just the ticket for a Federal Reserve rate cut at the September policy meeting.
- U.S. stock futures climbed and global risk appetite bounced, with European indices up and the S&P 500 hitting record highs
- FedWatch tool places odds for a rate cut at 97%+
- Treasury yields dropped to multi-week lows as bond traders pre-position for looser monetary policy
But the "bad news is good news" narrative has an edge: Only a "Goldilocks"-style jobs number (not too hot, not too cold) will keep this optimism afloat. Anything worse could tip markets into a risk-off scramble—anything better might delay the Fed’s decision to cut rates.
Elsewhere, eyes are on China’s wild stock market rally, which is raising eyebrows as government regulators consider new curbs to restrain speculative euphoria and protect retail investors from a dramatic reversal.
