S&P500: Can the Index Extend Gains Today or Will Labor Data Trigger Reversal?

S&P 500 Futures Edge Up as Traders Brace for August Jobs Report

U.S. equity futures showed mild strength early Friday as investors positioned themselves ahead of the closely watched August jobs report. S&P 500 futures rose 0.2%, Nasdaq-100 futures gained 0.5%, while Dow Jones futures slipped 0.1%.

With Wall Street fresh off record highs, the market’s next move hinges on whether the labor data hits the “just right” zone that could support a Federal Reserve rate cut without raising deeper economic concerns.

Will the August Jobs Report Justify a Fed Rate Cut?

Economists surveyed by Dow Jones expect nonfarm payrolls to show 75,000 jobs added in August, while the unemployment rate is forecast to rise to 4.3%. These figures would reinforce a narrative of a cooling labor market, already hinted at by this week’s disappointing ADP private payrolls report. According to the CME FedWatch Tool, traders are pricing in a 97% probability of a Fed rate cut at the central bank’s September 17 meeting.

Chris Larkin of E-Trade at Morgan Stanley noted that while a mild slowdown could fuel bullish sentiment in the short term, overly weak data risks sparking recession worries. Adam Crisafulli of Vital Knowledge suggests an ideal payroll range of 70,000 to 95,000—soft enough to trigger rate relief, but strong enough to avoid panic.

Can the S&P 500 Sustain Record Levels?

The S&P 500 notched another record close on Thursday, bolstered by a late-day rebound in risk appetite. It’s currently up 0.7% for the week, with the Nasdaq ahead 1.2% and the Dow rising 0.2%. Despite these gains, the jobs data could alter the tone dramatically. A stronger-than-expected print could reduce the likelihood of a rate cut, putting pressure on tech and rate-sensitive sectors. Conversely, a significantly weak print could weigh on sentiment more broadly.

How Are Traders Positioning Ahead of the Report?

With the benchmark index at all-time highs and expectations of easing firmly priced in, traders are entering the report cautiously. Market participants are increasingly focused on economic data over earnings, and the jobs number could be the key driver into the next Fed meeting. Options activity suggests hedging into the release, while futures positioning reflects mild optimism.

Outlook: Jobs Data Will Set the Fed’s Next Move

The immediate market outlook hinges on whether the jobs report falls within the market’s expected range. A figure close to 75,000–95,000 could solidify expectations for a September rate cut and support further upside in equities. However, a major miss on either side could prompt repricing—either through concerns about a stalled economy or a delayed Fed pivot. Traders should stay alert to revisions and wage growth data, as these could further sway sentiment.

More Information in our Economic Calendar.