Stock Market Today: Nasdaq, S&P 500 Rising, Dow Set to Open Down; Nvidia, Lumen, Eli Lilly, Bumble, and More Movers

In Tokyo, the Nikkei closed 0.7% lower as the yen climbed, undoing some of the calm from Wednesday when the Bank of Japan indicated it will be careful with further interest-rate increases. South Korea’s Kospi also fell, weighed by chip stocks and Wall Street sentiment.

Today’s U.S. weekly jobless claims data will also be watched anxiously after Friday’s weaker-than-expected nonfarm payrolls report prompted markets to price in more aggressive Federal Reserve interest-rate cuts.

Bond yields were lower. The rate on the benchmark 10-year U.S. Treasury bond was at 3.903%, while the yield on the 2-year note was at 3.935%.

After the wild stock market swings this week, the outlook for Federal Reserve interest rates has shifted, according to the CME FedWatch tool.

Over just the past few days, the odds of a half-point cut in September–double the size of the usual quarter-point move–have grown to 71%. A week ago, the odds were 22%, and a month ago they were less than 5%.

Expectations for the Fed rates by the end of the year have shifted even more dramatically. A month ago, traders saw a roughly 50:50 chance that the Fed’s key rate would be a half point lower in December. Now there’s roughly even odds that it will be a whole point lower at 4.25% to 4.5%, or 1.25 points lower at 4% to 4.25%.

So traders don’t just expect the Fed to make a bigger reduction in September. They see at least a half-point more in cuts than they did just a few weeks ago.

With markets on edge early Thursday, the weekly initial jobless claims data due out at 8:30 a.m. could take on outsized importance.

Economists expect claims to slip to 240,000 from 249,000. The risk for stock traders is that a surprise jump could fan fears of an upcoming recession.

Of course, claims could also come in lower than expected. But on a day when traders are looking for bad news, that might not make as much of an impact. It’s a measure that we get every week, and usually doesn’t cause a stir.