S&P 500 and Nasdaq notch record high closes, investors bet rate cut

The S&P 500 and Nasdaq notched record high closes on Tuesday, while UnitedHealth rallied, and a downward payrolls revision supported expectations the Federal Reserve will soon cut interest rates to shore up economic growth.

The U.S. economy likely created 911,000 fewer jobs in the 12 months through March than previously estimated, the government said, suggesting that job growth was already stalling before President Donald Trump launched his global tariffs.

Financial markets have priced in a 25 basis point cut at the Fed’s policy meeting next week, and futures trading suggests a nearly 10% chance of a 50 basis point cut, according to CME’s FedWatch tool.

Recent nonfarm payroll data for July and August also pointed to weakening labor market conditions.

“This does nothing to dissuade the Fed from moving 25 basis points,” said Paul Nolte, a market strategist at Murphy & Sylvest in Chicago, about the payrolls revision. “We don’t know month by month and won’t for a few more months yet, but it points out that labor is weak.”

UnitedHealth jumped after it said it expects enrollment in top-rated Medicare insurance plans to be in line with its expectations, which could mean bigger payments from the government to the health insurer.

JPMorgan Chase rose 1.7% after a senior executive said investment banking revenue will grow in the low double digits for the third quarter and that markets revenue would grow in the high teens percentage rate for the third quarter.

“That’s all good news, signs of a good, thriving economy. M&A is coming back after Trump’s Liberation Day put a screeching halt to that,” said Jed Ellerbroek, a portfolio manager at Argent Capital, referring to U.S. tariffs announced in April.

The S&P 500 climbed 0.27% to end the session at 6,512.61 points, its highest close ever. The Nasdaq gained 0.37% to 21,879.49 points, also a record high close. The Dow Jones Industrial Average rose 0.43% to 45,711.34 points.

Eight of the 11 S&P 500 sector indexes rose, led by communication services, up 1.64%, followed by a 0.71% gain in utilities.

Year to date, the S&P 500 has gained about 11%, while the Nasdaq is up 13%.

Shares of Apple fell 1.5% after the company unveiled new iPhones that failed to excite investors.

Broadcom dipped 2.6% after the world’s second most valuable chipmaker gained in the five previous sessions.

Investors will focus on a producer inflation report on Wednesday and consumer prices data on Thursday to gauge the impact of Trump’s tariff policies, and whether a case could be made for more aggressive interest rate cuts.