Nasdaq and S&P 500 Climb Amid Positive Service Activity Data Despite Mixed Employment Reports

The Nasdaq and the S&P 500 edged higher on Thursday following a favorable services activity survey which alleviated some concerns about a slowdown in economic activity. While focus remains on the Federal Reserve's anticipated interest rate cut, mixed employment data and historical weakness in September for U.S. equities temper market optimism.

The Nasdaq and the S&P 500 edged up on Thursday following a positive services activity survey that eased concerns over a potential economic slowdown, shifting focus to the expected Federal Reserve interest rate cut later this month.

An Institute for Supply Management survey revealed that the U.S. services sector activity rose to 51.5 in August, exceeding the expected 51.1. Additionally, new jobless claims declined, as reported by the Labor Department, boosting market sentiment despite a less optimistic ADP National Employment Report. This report showed private sector hiring at its lowest in three and a half years.

Traders now see a 55% chance of a 25-basis point cut in interest rates at the Fed's September meeting, up from a 45% likelihood for a more substantial 50-basis point cut. Market gains were partly driven by Nvidia's 2.5% rise after recent losses, with other tech giants like Amazon, Apple, and Alphabet also rebounding.

(With inputs from agencies.)