Stocks surged on Wednesday as signs of a cooling labor market fueled expectations for an earlier rate cut from the Federal Reserve. Traders and investors also analyzed a fresh batch of quarterly earnings and economic data.
The private sector added 152,000 jobs last month, a slowdown from April’s 188,000 hires, according to ADP. Economists were expecting 175,000 new jobs, but the report is seen as unreliable by some experts. Despite this, economists predict hiring will continue to slow in the coming months.
The ADP data, along with a recent report showing a decrease in job openings, has raised expectations for a rate cut in September. The probability of a rate reduction in September rose to 59% from 56% the day before, according to CME Group’s FedWatch Tool.
However, positive news from the U.S. services sector tempered some of these expectations. Economic activity in the sector grew in May after contracting in April, according to the Institute for Supply Management’s Services ISM Report On Business.
In stock news, Hewlett Packard Enterprise (HPE) saw its stock rise nearly 11% after beating expectations for its fiscal second quarter. CrowdStrike Holdings (CRWD) also experienced a boost in its stock price following a strong quarterly earnings report.
On the other hand, Dollar Tree (DLTR) shares fell after the company announced a strategic review of its Family Dollar business, potentially including a sale. The stock lost 4.9% on the session, making it one of the worst performers in the S&P 500.
Overall, the S&P 500 rose 1.2% to 5,354, the Nasdaq Composite added nearly 2% to 17,187, and the Dow Jones Industrial Average rose 0.3% to 38,807. Investors will continue to monitor economic data and earnings reports for further insights into the market’s direction.
