On Friday, the US jobs report came in surprisingly weak, sparking immediate fears of a recession. Wall Street didn’t like it — the Dow, Nasdaq and S&P 500 all dropped. But by Monday, things had changed. The Dow jumped more than 500 points overnight, and our SPI futures suggest the Australian market will open strongly.

The answer, as it so often is with the US, is optimism. Supreme optimism.

Despite the recession chatter, American investors flipped the narrative fast. They looked at the soft jobs data and saw a silver lining — the prospect of interest rate cuts. That shift in mindset helped markets bounce back in dramatic fashion.

This is what I find fascinating about the US market psyche. Where others see trouble, Wall Street often sees opportunity. And right now, investors are thinking: weak data means less pressure on the Fed, which could mean rate relief sooner than expected.

But before we all get carried away, let’s remember: September is historically the worst month for US stocks. It’s known as the “September Effect,” and it tends to trip up even the most optimistic traders. So while the bounce is encouraging, I’m staying cautious.

In fact, I’ve been holding back my own cash — and that of my financial planning clients — waiting to see how this recession talk plays out. My short-term play is to watch how the market reacts this week. Long-term? That depends on how deep these cracks in the economy go.

For now though, optimism is back — and in America, that’s usually enough to keep the rally alive, at least for a little while.