The S&P 500 rose 1.5% Monday, following its worst day since May. The Dow Jones Industrial Average jumped 1.3%, and the Nasdaq composite climbed 2%. Gains for Tyson Foods and other companies following better-than-expected profit reports helped offset a drop for Berkshire Hathaway.

The bleak data did not just trigger the market selloff but also forced a dramatic rethink of the Fed's rate trajectory. Traders, who had been leaning toward another pause in September, are now seeing an 85% chance of a rate cut,