The S&P 500 and Nasdaq indexes rose Wednesday, posting record closes, after data pointing to a weaker economy fueled expectations that the Federal Reserve may cut interest rates in September.
The Dow Jones ended little changed after spending much of the session lower, weighed down by selling in healthcare and consumer stocks during a shorter trading session ahead of July 4. The market will be closed Thursday for U.S. Independence Day, keeping trading volumes low throughout the week.
Both ADP’s private sector employment report and weekly jobless claims data pointed to easing labor market conditions ahead of Friday’s nonfarm payrolls report. Markets are hoping that signs of weakness in the labor market will encourage the Fed to cut interest rates.
“This is a fairly strong number of jobless claims, and it fits into a broader trend that probably points to easing in the labor market. That should be positive for the Fed,” said David Morrison, senior market analyst at Trade Nation.
In addition, PMI data from the Institute of Supply Management was weaker than expected and factory orders unexpectedly fell. Investors have increased bets on a September interest rate cut to more than 70%, according to LSEG’s FedWatch.
The minutes of the Fed’s June meeting will be released after the markets close.
Tesla jumped, trading near a six-month high, after rising more than 10% on Tuesday following a smaller-than-expected decline in second-quarter vehicle deliveries.
According to preliminary data, the S&P 500 rose 0.50% to close at 5,536.83 points, while the Nasdaq Composite rose 0.88% to 18,188.30 points. The Dow Jones fell 0.07% to 39,305.44 points.
Source: Terra
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