Stocks closed higher yesterday, led by the Nasdaq with a 0.45% gain. They also put in a new all-time high close in the process.

Last Friday's weaker-than-expected Employment Situation report all but solidified that the Fed will finally cut rates next week when they meet on September 16-17. Of course, nothing is a done deal until it is. But the CME's FedWatch tool places the odds at nearly 100% that the Fed cuts rates at the next meeting. The overwhelming likelihood is for 25 basis points. But there's more than a 10% likelihood it'll be for 50 bps.

Of course, the real question now seems to be if they'll cut just once, and then pause again, or if it will be the opening to a series of cuts, much like last September's inaugural rate cut (50 bps, followed by two more 25 basis point cuts).

Today, we'll get another piece of data that is likely to support the idea of cuts. And that's the job data revisions for the previous period of April 2024 to March 2025. The one before that (April 2023 to March 2024), was revised sharply lower, slashing -818,000 job gains from the records, or a reduction of roughly -68,166 jobs per month. That was the largest reduction in 15 years. And it fueled plenty of skepticism surrounding the employment report.

Today's revision is estimated to shave off between -470,000 to -740,000 jobs from the payroll numbers previously reported.

A large revision would only underscore the concern the Fed has recently shared, saying there's a greater risk to the labor market than inflation.

After that, however, we'll get a look at two more inflation reports: Wednesday's (9/10) Producer Price Index (PPI ? wholesale inflation), and Thursday's (9/11) Consumer Price Index (CPI ? retail inflation).

While the main focus has shifted from inflation to jobs, the Fed is tasked with a dual mandate, which is price stability (low inflation), and maximizing employment. So, those inflation reports matter. But short of a sharply higher-than-expected reading, it's unlikely to make much difference next week. (But it could have some impact into what happens in future meetings.)

In other news today, we'll get the NFIB Small Business Optimism Index.

There's only a little more than 3½ months left in the year. And stocks are currently sitting at or near their all-time highs or YTD highs.

The Dow is up 6.98%, the S&P 500 is up 10.4%, the Nasdaq is up 12.9%, the small-cap Russell 2000 is up 7.39%, and the mid-cap S&P 400 is up 5.62%.

And I'm expecting more gains by year's end, giving the S&P 500 another 20%+ gain for 2025, and making it the third year in a row of 20%+ gains (2023 was up 24.2%, and 2024 was up 23.3%).

While it's true that September is historically one of the toughest months for stocks (particularly the back half), I believe the unprecedented AI trade, coupled with interest rate cuts, will fuel a historic bull rally, much like we saw in 1995-1999 when the dot com tech boom led to 5 years in a row of 20%+ gains.

And I'm expecting the same thing with the AI boom, 5 years (or more) of 20%+ gains per year.

See you tomorrow,