Nonfarm payroll data to be released soon; Broadcom rises about 6% in U.S. premarket trading, most Chinese concept stocks up.

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As expectations rise for the latest U.S. employment report, global stock markets continue to rally. Investors generally believe that the upcoming report will clear the way for the Federal Reserve to resume rate cuts this month, thereby boosting market optimism.

Buoyed by these expectations, Broadcom rose about 6% in pre-market U.S. trading after the company’s third-quarter results beat expectations and it significantly raised its 2026 growth forecast. Most Chinese concept stocks also rose, with Alibaba up about 3%. U.S. stock index futures rose slightly: Dow futures up 0.1%, S&P 500 futures up 0.2%, and Nasdaq 100 futures up 0.4%. European markets also performed steadily, with the Stoxx 600 index inching up 0.1% and the euro rising 0.2%.

U.S. Treasury prices were largely flat, with the two-year Treasury yield hovering near its lowest level in nearly a year. The dollar is headed for its weakest week of the year, while gold prices are consolidating near their highs.

Employment Data in Focus as Market Bets on Fed Rate Cuts

Market participants are closely watching the details of the data for evidence of a cooling labor market. According to economists’ general forecasts, the U.S. is expected to add about 75,000 jobs in August, with the unemployment rate projected at 4.3%. If this forecast materializes, it would mark the fourth consecutive month of job growth below 100,000—the weakest growth stretch since the onset of the pandemic in 2020.

However, not all data points to weakness. Max McKechnie, global market strategist at J.P. Morgan Asset Management, wrote in a report:

"The data released today is unlikely to show the kind of pronounced weakness that would force the Fed to accelerate its easing plans. Investors should instead pay more attention to the unemployment rate and wage growth for clearer insight into the Fed’s next move."

Currently, money markets have fully priced in a 25-basis-point Fed rate cut this month, and expect at least two rate cuts by the end of the year. Bond markets appear to have put recent concerns aside, with all eyes now on Friday’s U.S. employment data.

However, the report needs to strike a delicate balance to maintain market optimism. According to strategist Mary Nicola:

"A sharp slowdown in the data will rekindle concerns about a recession, while a strong report could bring trouble by slowing the pace of easing and increasing the political pressure on the Fed."

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