Investors eye jobs data to support path to rate cuts

This week's US jobs data may need to tread a fine line for Wall Street, revealing a cooling labour market that supports further interest rate cuts without fuelling fears about a recession.

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While stocks have edged lower this week, US equity indexes remain near record highs after a relentless rally that has put the benchmark S&P 500 on pace for its best third-quarter performance since 2020.

Some investors say the market's ascent is making stocks vulnerable to any disappointments. Complicating the release of the jobs data is the potential for a US government shutdown next week that, should it come to pass, could mean the employment report is not released as scheduled next Friday.

The jobs data will help show whether the labour market is "simply experiencing a soft patch," said Mark Luschini, chief investment strategist at Janney Montgomery Scott.