Wall Street Braces for Potential Fed Interest Rate Cuts Following Weak Jobs Report

Wall Street's key indexes showed signs of recovery on Monday, bouncing back from last week's decline, fueled by optimism that the Federal Reserve might soon lower interest rates following the release of discouraging jobs data.

The nonfarm payrolls report, which underscored a weakening U.S. job market, initially pushed major indexes down. However, it also led traders to bolster their expectations for a 25-basis-point cut, currently bet at 88% according to CME Group's FedWatch Tool. A substantial 50-bps cut is also being considered now, compared to expectations prior to the jobs data.

Market analysts, including Robert Pavlik of Dakota Wealth, are evaluating whether a September rate cut would be sufficient to prevent further economic weakening. Upcoming inflation data, as well as insights from the University of Michigan, could further solidify the case for rate adjustments. Meanwhile, companies like Robinhood and EchoStar made notable gains in premarket trading, with EchoStar announcing a major spectrum sale to SpaceX.

(With inputs from agencies.)