SPX: S&P 500 Surges 1.5% as Traders Bet on Fed Rate Cut — When Bad News Becomes Good News

📉 Friday Shock, 📈 Monday Surge: Markets Bet on a Fed Pivot

The S&P 500 (SPX) jumped 1.5% Monday, rebounding sharply after Friday’s market-rattling jobs report. The surprising weakness in job growth has reignited hopes for a Federal Reserve rate cut in September, sending investors rushing back into risk assets.

Dow Jones surged 585 points (1.3%), while the Nasdaq Composite led with a 2% gain, flipping the narrative from panic to optimism in a single session. Even small-caps joined the party, hinting at improved market breadth — a rare and bullish signal.

📊 Big Miss, Big Repricing

Friday’s nonfarm payrolls report showed just 73,000 jobs added, alongside major downward revisions to May and June. That wiped out 258,000 phantom jobs the Fed may have still been relying on.

Before the report, traders priced in just a 38% chance of a September rate cut. By Monday, that jumped to 92.1%. The message: the labor market is cooler than the Fed admitted — and a policy pivot may be closer than expected.

😷 August: Allergy Season for Stocks?

Despite Monday’s relief rally, history isn't on investors' side — August has been the Dow’s worst month since 1988, and volatility often picks up across all major indexes.

But with the return of the “bad news is good news” trade, bulls are back in action — willing to bet weak data will finally force the Fed’s hand.

🎬 The Bottom Line
The market is cheering for a cut. The Fed may finally deliver.
But with Trump reshuffling BLS leadership like a reality show cast, don’t expect data-driven clarity anytime soon.