Stocks rose higher on Thursday as the latest labor market data showed more signs of weakness, supporting outlooks that the Federal Reserve could issue an interest rate cut at its September meeting.

The S&P 500 Index (SPY  ) soared to its 21st record close so far this year on Thursday, adding over 0.8% to settle at 6,502.08. The Dow Jones Industrial Average (DIA  ) climbed over 350 points on Thursday to close at 45,621.29, while the Nasdaq Composite (QQQ  ) advanced nearly 1% to end the session at 21,707.69.

The labor market remained in the spotlight on Thursday, as U.S. private sector hiring slowed in August while initial unemployment claims rose last week.

Private payrolls increased by a less-than-expected 54,000 last month, data from payroll processing firm ADP showed on Thursday, with the hiring rate effectively slowing by half of July's revised gain of 106,000. Nela Richardson, chief economist at ADP, said potential drivers of the decline in growth could be the labor shortages and market disruptions from artificial intelligence.

"The year started with strong job growth, but that momentum has been whipsawed by uncertainty," Richardson said in a press release.

First-time jobless claims rose by 8,000 from the previous week to a more-than-expected 237,000 for the week ended Aug. 30, according to a seperate report released by the Labor Department on Thursday. Another report from outplacement firm Challenger, Gray and Christmas showed layoffs from American employers surged 39% in August to roughly 86,000 positions.

Investors were further encouraged that more signs of labor market weakness, building on Wednesday's Job Openings and Labor Market Turnover Survey (JOLTS) showing more Americans were unemployed than positions available in July, could mean the central bank could reduce its benchmark overnight interest rate for the first time since December later this month. Traders are currently pricing in a nearly 98% chance of at least a 25-basis-point cut, according to CME Group's FedWatch tool.

On the earnings front, Salesforce (CRM  ) shares weighed down some of the Dow's gains on Thursday after the CRM software provider reported better-than-expected fiscal second-quarter results late Wednesday, but issued lackluster forward guidance for its current quarter. The company expects fiscal third-quarter adjusted earnings per share between $2.84 to $2.86 on a revenue range of $10.14 billion to $10.29 billion, coming in-line with expectations.

Salesforce also maintained its full-year revenue outlook, but raised its earnings forecast to a new range of $11.33 to $11.37 from its previous $11.27 to $11.33 on revenue between $41.1 billion to $41.3 billion.

American Eagle (AEO  ) shares popped nearly 38% on Thursday after the company re-issued its full-year guidance late Wednesday, benefiting from its controversial advertising campaign with actress Sydney Sweeney earlier in the quarter. The apparel retailer now expects full-year comparable sales to be approximately flat, compared to the 0.2% decline called for by analysts, according to StreetAccount.

"The fall season is off to a positive start. Fueled by stronger product offerings and the success of recent marketing campaigns with Sydney Sweeney and Travis Kelce, we have seen an uptick in customer awareness, engagement and comparable sales," CEO Jay Schottenstein said in a news release. "We look forward to building on our progress and the continued strength of our iconic brands to drive higher profitability, long-term growth and shareholder value."

Figma (FIG  ) shares dropped nearly 20% on Thursday after the design software provider's first earnings report since its initial public offering in July as its second-quarter results come mostly in-line with estimates. Figma's third-quarter guidance also failed to wow analysts, with the company forecasting revenue between $263 million and $265 million, coming in below expectations.

Since surging 250% in its trading debut, the company has lost more than half its value.

Looking ahead, all eyes will be on the Labor Department's "official" job number for August on Friday, which is expected to show non-farm payrolls expand by 75,000 and the unemployment rate tick higher to 4.3%. Key earnings reports for Friday also include Broadcom (AVGO  ), Lululemon Athletica (LULU  ) and DocuSign (DOCU  ).