Wall Street climbs as weak data boosts Fed rate cut hopes

US stocks gained ground in afternoon trading on Thursday as soft economic data bolstered expectations of multiple interest rate cuts this year from the US Federal Reserve (Fed). The S&P 500 and Dow Jones edged roughly 0.40% higher, with both indices nearing record highs. The US private sector added just 54 000 jobs in August, while initial jobless claims rose to their highest level in two months - points of concern that reinforce a cooling labour market ahead of the all-important payrolls release tomorrow.

In South Africa, the rand weakened against the stronger dollar following the lacklustre private payrolls figures, which only added to speculation of imminent Fed rate cuts. At approximately 15h07 GMT, the rand was trading at R17.66 to the dollar, around 0.20% lower than Tuesday, and the JSE Top‑40 index fell 0.80%. Meanwhile, government bonds strengthened, with the yield on the 2035 issue dropping 2.5 basis points to 9.62%.

London’s FTSE 100 climbed about 0.40% to close at 9 217; the highest level seen in a week - as bond markets stabilised and investor confidence returned. Market focus shifted towards the ADP labour data and growing hopes that rate cuts by the Fed might be on the horizon. Retail shares outshone others, with Currys jumping over 15% following an upbeat trading update, while financials and real estate names also reflected the improved mood.

European equities enjoyed a similar rebound: the STOXX 50 and STOXX 600 added 0.40% and 0.60% respectively, extending gains after the previous day’s slump as long-term yields eased and concerns about borrowing costs diminished.

In Asia, Japan’s markets followed Wall Street higher. The Nikkei 225 rose 1.53% to settle at 42 580, and the Topix Index added 1.03% to close at 3 080, buoyed by a tech rally - especially shares like Alphabet and Apple - despite caution over global economic weakness.

However, Chinese stock markets retreated further, with the Shanghai Composite falling 1.25% to 3 766 and the Shenzhen Component shedding 2.83% to 12 119, marking a third straight day of declines as investors took profits. A report that Chinese regulators may tighten market rules - possibly easing short-selling restrictions - also dampened sentiment.

In commodities, oil prices slipped as WTI crude futures fell to US$63.50 per barrel, extending a 2.50% decline amid rising supply concerns. Conversely, gold remained resilient trading near US$3 550 per ounce and close to record highs - supported by expectations of Fed easing and growing demand for safe-haven assets.