Stocks climbed on Thursday as investors digested softer-than-expected ADP private payrolls for August and positioned for Friday’s U.S. jobs report; the S&P 500 rose 0.4%, the Nasdaq gained 0.3%, and the Dow added about 170 points (roughly 0.4%), even as Salesforce shares fell after conservative third-quarter revenue guidance.
Key Takeaways
- ADP reported 54,000 private payrolls added in August, below the 75,000 Dow Jones consensus and July’s revised 106,000.
- Initial jobless claims rose to 237,000 for the week ended Aug. 30, higher than expected and up about 8,000 from the prior week.
- ISM non-manufacturing PMI improved to 52.0 in August, above forecasts of 50.8 and July’s 50.1.
- Markets priced in a greater probability of a Federal Reserve cut on Sept. 17, according to CME Group’s FedWatch tool.
- Salesforce trimmed revenue guidance for Q3 to $10.24–$10.29 billion, pressuring its stock and moderating index gains.
- Traders are awaiting Friday’s nonfarm payrolls report, where economists expect a 75,000 gain for August (Dow Jones consensus).
Verified Facts
The ADP National Employment Report, released Thursday morning, showed private-sector payroll growth of 54,000 in August. That outcome was weaker than the 75,000 figure economists surveyed by Dow Jones had forecast and well below July’s revised gain of 106,000, signaling a notable slowdown in private hiring momentum.
Weekly initial unemployment claims for the week ending Aug. 30 rose to 237,000, an increase of about 8,000 from the prior week and above the Dow Jones estimate of 230,000. Rising claims add to evidence that labor-market momentum has softened after stronger prints earlier in the year.
On the activity front, the ISM non-manufacturing PMI edged up to 52.0 in August, slightly ahead of the 50.8 consensus and higher than July’s 50.1 reading, indicating continued expansion in services but not at a pace that rules out cooling in labor demand.
Equity futures and Fed funds futures moved after the ADP release, with traders increasing the odds they assign to a Fed rate cut at the Sept. 17 meeting, per CME Group’s FedWatch tool. Market-implied probabilities have a history of adjusting quickly to labor-slide signals, which can change expectations for policy timing.
Context & Impact
Investors are treating the ADP miss as evidence the labor market’s rate of improvement has slowed but not collapsed. That nuance explains why markets rose on Thursday: softer payrolls increase the likelihood of an earlier Fed easing, which can support risk assets, while still stopping short of recessionary concern.
Company-level results continue to shape intraday moves. Salesforce’s reduced revenue outlook for Q3 weighed on its shares and on broader tech sentiment during parts of the session. Separately, mixed earnings from retailers and tech firms produced a choppy tape beneath the headline index gains.
- Policy: A sustained easing in labor readings would raise the probability of Fed cuts this autumn.
- Markets: Tech-led strength can lift the S&P and Nasdaq even as cyclical names underperform.
- Economy: Upbeat ISM services suggests activity is holding, but hiring softens unevenly.
“ADP data continue to reinforce the narrative that the rate of positive change in the labor market has slowed significantly,” said Jamie Cox, managing partner at Harris Financial Group, noting the Fed may tilt toward cuts in September.
Harris Financial Group
Unconfirmed
- No official Fed announcement has confirmed a Sept. 17 rate cut; futures markets reflect probabilities, not guarantees.
- Reports of the exact market reaction later in the day may vary by index and sector; intraday reversals are possible.
Bottom Line
Thursday’s softer ADP print and higher jobless claims nudged investors toward betting on earlier Fed easing, supporting U.S. equities despite patchy company results. Friday’s nonfarm payrolls will be decisive: a much-weaker-than-expected print would further lift cut odds, while a stronger reading could revive tightening concerns and prompt volatility.