Soft Jobs Report Fuels Record Stock Rally, Bitcoin Soars
US markets rallied as a softer-than-expected jobs report triggered broad gains. The S&P 500 climbed 0.4% to a record 6,537 and the Nasdaq rose 0.9%, while the Dow Jones added 50 points. The jobs report showed only 22,000 jobs added in August versus 75,000 forecast. The unemployment rate rose to 4.3%, with the broader U-6 rate at 8.1%. Traders ramped up bets on a 25bps Federal Reserve rate cut in September, and some even discussed a potential 50bps reduction. The rally extended into crypto markets, with Bitcoin jumping 3% above $113,000 and Ethereum gaining 2% past $4,470.
Bullish
Traders view the softer jobs report as a catalyst for Federal Reserve rate cuts, which historically boost risk assets. Similar episodes in 2020 saw stocks and cryptocurrencies rally ahead of policy easing. In the short term, weaker labor data has triggered momentum buying in both equities and digital assets. Over the longer term, an imminent rate cut could sustain upward pressure on asset prices by lowering borrowing costs and enhancing liquidity. However, market participants should monitor potential inflationary pressures and central bank strategy shifts that may emerge once the rate-cut cycle concludes.