S&P 500 Shatters Records While Jobless Claims Hit 4-Year Peak - What’s Really Driving This Paradox?

Markets defy gravity as unemployment spikes—classic Wall Street disconnect.

The Index's Record Run

S&P 500 rockets to unprecedented heights, ignoring traditional economic signals that typically spook investors. Another day, another all-time high—because why should fundamentals matter when momentum's your co-pilot?

Employment Reality Check

Initial jobless claims surge to levels not seen in four years, painting a stark contrast to the equity euphoria. Main Street bleeds while Wall Street feasts—some things never change in the casino we call markets.

Digital assets watching from the sidelines, quietly noting how traditional markets celebrate economic pain as policy-easing fuel. Maybe decentralized finance isn't the craziest idea after all.

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Initial jobless claims for the week ended September 6 grew by 27,000 to 263,000, above the estimate of 235,000 and marking the highest reading since October 2021. Continuing jobless claims, which lag initial jobless claims by one week, fell to 1.939 million from 1.940 million and were below the estimate of 1.950 million.

Hotter CPI Data Fails to Deter Fed Rate Cut Odds

This morning, the latest inflation update was published as well. August’s Consumer Price Index (CPI) grew by 0.4% month-over-month, the highest rate since January and above the estimate of 0.3%. Core CPI, which excludes food and energy items, notched a monthly rise of 0.3%, matching the estimate. On an annual basis, CPI and core CPI increased by 2.9% and 3.1%, respectively. Both figures remain above the Fed’s long-term inflation target of 2.0%.

“While the CPI report is a tad hotter than expected, it will not give the Fed a moment of hesitation when they announce a rate cut next week,” wrote Principal Asset Management’s Sheema Shah. “If anything, the jump in jobless claims will inject a bit more urgency in the Fed’s decision making, with Powell likely signaling a sequence of rate cuts is on the way.”

The odds of a rate cut at the September 16-17 Federal Open Market Committee (FOMC) meeting remain at 100% following the new data, according to CME’s FedWatch tool.