5 September 2025,05:52
Daily Market Analysis
5 September 2025, 05:52
*U.S. equities surged, with the S&P 500 hitting a fresh all-time high and the Nasdaq leading gains on Fed rate-cut optimism.
*Softer job data, including weak ADP payrolls and higher jobless claims, strengthened expectations of Fed easing at the September meeting.
*Today’s payrolls report is seen as pivotal—weak data could fuel further gains, while a strong print may cap momentum and trigger volatility.
U.S. equities surged in the previous session, with all three major indices closing sharply higher as softer labor market data bolstered expectations for Federal Reserve rate cuts. The Nasdaq Composite led gains, advancing 0.98%, while the S&P 500 reached a fresh all-time high, reflecting broad-based optimism toward a potential shift in monetary policy.
The rally was fueled by weaker-than-anticipated employment indicators, including a subdued ADP private payrolls report and elevated initial jobless claims, which reinforced market confidence that the Fed could adopt a more accommodative stance at its upcoming September meeting. A lower interest rate environment is particularly supportive for growth-oriented sectors, with technology stocks leading the advance as the Nasdaq tests new highs.
In money markets, traders increased bets on Fed easing, driving the two-year Treasury yield to multi-month lows. Futures pricing now implies a high probability of rate cuts beginning in 2025, reflecting expectations that the central bank may prioritize supporting economic growth amid signs of cooling labor conditions.
All eyes are now on today’s Nonfarm Payrolls report. A soft print is likely to extend the equity rally by reinforcing dovish Fed expectations, while a stronger reading could temper recent gains and reintroduce volatility. With indices trading at elevated levels, near-term direction will be heavily influenced by the tone of upcoming macroeconomic data and Fed communications.
The S&P 500 surged into uncharted territory in the last session, with the index now hovering near its all-time high of 6,515. Should the benchmark fail to extend momentum for a fresh breakout, there remains scope for a pullback to fill the fair value gap (FVG) formed during the previous uptrend. However, the broader setup continues to favor the bulls—once that gap is filled, the index may stage another leg higher, potentially securing new record levels.
Momentum signals remain supportive. The RSI has broken into overbought territory, while the MACD continues to edge higher despite diverging, both pointing to strengthening bullish momentum in line with the prevailing upside bias.
Resistance level: 6550.00, 6585.00
Support level: 6505.00, 6475.00
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