The tech-heavy Nasdaq Composite increased by 80.79 points, representing a 0.4% rise, to finish at 21,879.49. The S&P 500 increased by 17.46 points, representing a 0.3% rise, concluding at 6,512.61. Seven of the 11 broad sectors of the benchmark index finished in positive territory. Utilities Select Sector SPDR advanced 0.7%, Communication Services Select Sector SPDR increased by 0.6%, and Health Care Select Sector SPDR rose 0.5%. In contrast, the Materials Select Sector SPDR experienced a decline of 1.6%. The fear gauge, as represented by the CBOE Volatility Index (VIX), experienced a decline of 0.5%, settling at 15.04. On Tuesday, trading volume reached 15.6 billion shares, which is below the 20-session average of 16.1 billion shares.

Weaker labor market data bolsters the argument for Federal Reserve interest rate cuts. On Tuesday, stock experienced an uptick following the release of the payrolls revision. Reinforcing the prevailing sentiment that the Federal Reserve might soon implement interest rate cuts. The report indicated a more significant downward adjustment to U.S. job growth over the past year than anticipated, underscoring a labor market that is less robust than previously believed. Investors viewed the data as evidence that the economy is decelerating at a faster pace, alleviating inflationary pressures and providing the Federal Reserve with increased flexibility to relax monetary policy. The Bureau of Labor Statistics disclosed a significant annual benchmark revision, reducing the previously reported payroll figures by approximately 911,000 jobs for the period from April 2024 to March 2025. This revision, which nearly reduced the initially projected job gains by half, represents the most significant downward adjustment in the history of the Bureau of Labor Statistics and highlights a labor market that is considerably weaker than previously perceived.

Equities exhibited a favorable response, with traders amplifying their wagers that the initial rate cut might occur as early as the Fed’s September meeting. The probabilities derived from market indicators for several rate cuts by the end of the year have increased, reflecting a heightened belief that the Federal Reserve is nearing the conclusion of its tightening phase. The FedWatch tool indicates a 91.7% likelihood of a 25 basis points rate reduction in September, a 68.9% chance of an additional 25 basis points cut in October, and a 59.5% probability of yet another 25 basis points decrease in December. Simultaneously, there exists a degree of caution, as investors assess the risk that the revisions indicate fundamental economic fragility that may constrain corporate earnings expansion. Nonetheless, the initial response was characterized by a prevailing sense of optimism regarding a potential shift in monetary policy towards a more accommodative stance in the near term.

The revision of payrolls, along with other indicators reflecting a softening labor market, has strengthened the perception that the Federal Reserve’s efforts to combat inflation have achieved notable advancements, thereby creating a favorable environment for Wall Street to sustain its rally in anticipation of potential rate relief. Consequently, shares of Vistra Corp. and AT&T Inc. increased by 3.1% and 1.8%, respectively. Both presently hold a Zacks Rank of #3. The comprehensive list of today’s Zacks #1 stocks is available here. UnitedHealth Group Incorporated’s shares jumped 8.6% following the announcement that approximately 78% of its Medicare Advantage members are expected to be enrolled in plans rated four stars or higher for the 2026 payment year.

The highly regarded plans are eligible for substantial government bonus payments, enhancing investor confidence in the robustness of UnitedHealth’s Medicare Advantage operations. The rally was bolstered by the company’s decision to reaffirm its full-year 2025 earnings outlook, providing reassurance to investors amid increased scrutiny in the healthcare sector. Consequently, the stock emerged as the leading performer on both the Dow Jones Industrial Average and the S&P 500 for the day, thereby propelling the healthcare sector along with it.