It’s a matter-of-fact Wall Street colloquialism at this point, helping investors rationalize their gains as conditions deteriorate around them. The logic is simple: bad data makes interest-rate cuts<\/a> more likely, and lower rates are bullish for stocks.<\/p>\n But there’s a catch with “bad news is good news,” and it’s that it can quickly flip to bad news simply being, well, bad \u2014 and it’s never clear when that shift will happen.<\/p>\n Based on recent events, investors should probably start to be on the lookout.<\/p>\n The latest hit to the US economic picture came on Tuesday, and it was a doozy: data showed that the US added nearly 1 million fewer jobs<\/a> than originally thought over the 12 months ending in March 2025. It was the worst-ever revision, according to Bloomberg data.<\/p>\n Perhaps even more alarming is that the overcounting of jobs was fully expected, with stocks barely batting an eye. The market has already digested two straight dismal jobs reports<\/a>, each with its own downward revisions, and investors seem to have gotten numb to labor-market pain.<\/p>\n But is job-market weakness alone enough to flip the stock market’s relationship with the economy into “bad news is bad news” territory? It hasn’t been yet, but there are mounting signs that the economic slowdown is spreading<\/a> outside the labor realm.<\/p>\n In the manufacturing sector<\/a>, data for August showed a sixth-straight month of contraction. And of course inflation remains a worry, with a measure of prices for services companies at its second-highest monthly level since 2022.<\/p>\n Adding to the risk equation is a stock market that’s already fully valued, with major indexes near record highs and AI-linked tech names trading at historically eye-popping valuations<\/a>.<\/p>\n And if you’re thinking “it’s OK, the rate cut in a couple weeks will save stocks,” then it might be time to reconsider.<\/p>\n Related stories<\/p>\n Business Insider tells the innovative stories you want to know<\/p>\n Business Insider tells the innovative stories you want to know<\/p>\n On Monday, the trading desk at JPMorgan warned that following a cut on Sept. 17 \u2014 something being assigned a near-100% probability by investors \u2014 stocks could actually pull back in a “sell the news” move<\/a>.<\/p>\n![\"\"\/](\"https:\/\/www.newsbeep.com\/il\/wp-content\/uploads\/2025\/09\/placeholder.png\")
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