Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., September 8, 2025. REUTERS/Jeenah Moon/File Photo

By Purvi Agarwal and Noel Randewich

(Reuters) - The S&P 500 climbed toward a record high on Tuesday, lifted by a rally in UnitedHealth, while a downward payrolls revision supported expectations the Federal Reserve will soon cut interest rates to shore up economic growth.

The U.S. economy likely created 911,000 fewer jobs in the 12 months through March than previously estimated, the government said, suggesting that job growth was already stalling before President Donald Trump launched his global tariffs.

Financial markets have priced in a 25 basis point cut at the Fed's policy meeting next week, and futures trading suggests a nearly 10% chance of a 50 basis point cut, according to CME's FedWatch tool.

Recent nonfarm payroll data for July and August also pointed to weakening labor market conditions.

"This does nothing to dissuade the Fed from moving 25 basis points," said Paul Nolte, a market strategist at Murphy & Sylvest in Chicago, about the payrolls revision. "We don't know month by month and won't for a few more months yet, but it points out that labor is weak."

UnitedHealth jumped 9% after it said it expects enrollment in top-rated Medicare insurance plans to be in line with its expectations, which could mean bigger payments from the government to the health insurer.

The S&P 500 was up 0.22% at 6,509.47 points.

The Nasdaq gained 0.20% to 21,842.45 points, while the Dow Jones Industrial Average was up 0.46% at 45,722.08 points.

Seven of the 11 S&P 500 sector indexes rose, led by communication services, up 1.49%.

The Nasdaq notched a record high close on Monday, and the S&P 500 was just below its intraday record high set last Friday.

The S&P 500 energy index was up 1.5% after Israel attacked Hamas leaders in Qatar's capital city, Doha.

Shares of Apple fell 1.4% after the company unveiled new iPhones that failed to excite investors.

Broadcom fell more than 2% after the world's second most valuable chipmaker gained in the five previous sessions.

Investors will focus on a producer inflation report on Wednesday and consumer prices data on Thursday to gauge the impact of Trump's tariff policies, and whether a case could be made for more aggressive interest rate cuts.

Nebius soared 53% after the AI infrastructure firm signed a $17.4 billion deal with Microsoft. Rival CoreWeave rose 6%.

Class B shares of Fox Corp and News Corp dipped 5.5% and 4.1% respectively. Rupert Murdoch and his children reached an agreement that will give the eldest son, Lachlan Murdoch, control over the media empire.

Albemarle plunged 11% due to easing supply concerns after Chinese battery company CATL expects to resume production at a lithium mine.

Oracle traded near flat ahead of its quarterly report after the bell, with investors looking for a reading of AI demand across the technology sector.

Declining stocks outnumbered rising ones within the S&P 500 by a 1.3-to-one ratio.

The S&P 500 posted 17 new highs and no new lows; the Nasdaq recorded 84 new highs and 60 new lows.

(Reporting by Purvi Agarwal and Ragini Mathur in Bengaluru, and by Noel Randewich in San Francisco; Editing by Pooja Desai, Maju Samuel, Rod Nickel)