Stocks were headed for more gains on Tuesday as investors carried on treating last week’s dismal nonfarm payrolls report as an opportunity to buy the dip, with the market now all but certain that the weak jobs numbers mean the Federal Reserve will cut interest rates in September.
Futures tracking the Dow Jones Industrial Average were up 23 points, or 0.1%. S&P 500 futures climbed 0.1%, and contracts tied to the tech-heavy Nasdaq 100 added 0.1%.
The three blue-chip indexes bounced back at the start of this week, paring back most of their losses from the selloff sparked by Friday’s soft jobs data.
The rally came as investors shored up their bets on lower borrowing costs. The odds of a September interest-rate cut jumped to 92.1% Monday, up from under 40% prior to the July employment report, according to the CME FedWatch tool.
“Markets put last week in the rearview mirror,” Hargreaves Lansdown analyst Matt Britzman said. “The potential for rate cuts, alongside a strong earnings season, is proving enough of a cocktail to keep the fire lit under U.S. stocks.”
The yield on the benchmark 10-year U.S. Treasury note was up 2 basis points to 4.22% in early trading on Tuesday. The dollar was roughly flat against its peers, and gold climbed 0.1% to $3,428 an ounce.
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