Investors brace for U.S. jobs report to shape Federal Reserve rate decisions

Investors are awaiting a key U.S. jobs report next week, which may influence interest rate decisions by the Federal Reserve. The S&P 500 is near record highs, boosted by expectations of continued rate cuts after a 75 basis point reduction in 2024. Recent strong economic data has raised concerns about inflation, leading to increased uncertainty regarding the Fed's rate path. Current futures indicate a 70% chance of a 25 basis point cut at the Fed's December meeting, but a strong jobs report could change that outlook. Consumer optimism remains high, with a record percentage expecting stock prices to rise. However, some analysts warn that excessive bullishness among investors could signal a potential market pullback.