SPY, QQQ Soar on Robust Services Data as Markets Brace for Pivotal Jobs Report
Wall Street's heavyweight ETFs just got a serious boost—and it's all thanks to surprisingly strong services sector numbers.
Services Sector Flexes Muscle
Fresh economic data shows the services industry firing on all cylinders, pushing SPY and QQQ into bullish territory. Nobody saw this kind of momentum coming—especially not with the jobs report looming.
Jobs Report: The Real Test
All eyes now turn to the upcoming employment data. If the numbers disappoint, this rally might be nothing more than a prelude to a classic 'buy the rumor, sell the news' Wall Street special. Because let's be real—since when has good news ever been enough for this market?
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
The two indexes opened on shaky legs after ADP private payrolls showed the addition of 54,000 jobs in August, falling short of the estimate of 65,000. On top of that, initial jobless claims for the week ended August 30 grew by 8,000 to 237,000, ahead of the estimate of 230,000. Continuing jobless claims of 1.944 million were below the expectation for 1.959 million, although the reading remains elevated. The data signals that employers are still hesitant to both fire and hire workers.
The Institute for Supply Management’s services purchasing managers’ index (PMI) helped drive the afternoon rally, growing by 1.9 points to 52.0 and beating out the expectation of 51.0. The index is closely watched because the services industry is the largest sector of the U.S. economy.
“Twelve industries reported growth in August, one more than in July,” said Steve Miller, chair of the ISM Services Business Survey Committee. “The Services PMI has expanded in 11 of the last 12 months, but the August reading of 52 percent is 0.4 percentage point below the 12-month average reading of 52.4 percent.”
On Friday, the Labor Department will release August’s nonfarm payrolls data, with economists expecting an increase of 75,000 jobs and unemployment rising to 4.3%. It will be the first report since President TRUMP fired Bureau of Labor Statistics Commissioner Erika McEntarfer after May and June’s nonfarm payrolls were revised lower by a combined 258,000 jobs. In addition, Trump claimed that McEntarfer faked “the Jobs Numbers before the Election to try and boost Kamala’s chances of Victory.”
Meanwhile, the Justice Department has formally launched an investigation against Fed Governor Lisa Cook over mortgage fraud allegations from President Trump and Federal Housing Finance Agency (FHFA) Director Bill Pulte. Last month, President Trump attempted to fire Cook after Pulte accused her of fraud by listing two properties as primary residences, unfairly receiving mortgage benefits in the process. Cook countered with a lawsuit and claimed that Trump is acting without cause to undermine the Fed’s independence.
The S&P 500 (SPX) closed with a 0.83% gain while the Nasdaq 100 (NDX) returned 0.90%.
