Stocks got some lift from easing pressure from the bond market, where Treasury yields fell following reports on the weaker US job market. One report suggested employers, not including the government, nearly halved their hiring last month. Another said that more workers applied for unemployment benefits last week in an indication of rising layoffs.

Neither number is flashing a recession, and a third report on activity for businesses in the information and other services industries showed a stronger-than-expected growth.

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The upside for investors of a slowdown in the job market is that it could push the Federal Reserve to consider cutting its main interest rate for the first time this year at its next meeting in a couple of weeks. Such cuts can kickstart the economy and job market, though they can also stoke inflation.

So far this year, the Fed has kept its main interest rate on hold because it’s been more worried about inflation potentially worsening because of President Donald Trump’s tariffs than about the job market.

“The year started with strong job growth, but that momentum has been whipsawed by uncertainty,” according to Nela Richardson, chief economist at ADP. She said several things could be behind the slowdown, including “labour shortages, skittish consumers, and AI disruptions.”

A more comprehensive report on the job market’s health during August will arrive on Friday from the US Labour Department, and it will likely carry much weight with the Fed. Ahead of it, the yield on the 10-year Treasury fell to 4.18 per cent from 4.22 per cent late Wednesday.

Last month’s grim jobs report, which included massive downward revisions for June and May, sent financial markets spiralling and prompted Trump to fire the head of the agency that compiles the monthly data.

On Wall Street, American Eagle Outfitters jumped 37.9 per cent after the teen fashion retailer reported more than double the profit that analysts had expected for its latest quarter. It benefited from a frenzy of media attention in late July over a provocative advertising campaign featuring actor Sydney Sweeney.

The ads — which featured the tagline “Sydney Sweeney has great jeans” — sparked a debate about race, Western beauty standards, and the backlash to “woke” American politics and culture.