Stock market today: Indexes rise as weak private payroll data boosts optimism for rate cuts
- Stocks rose on Wednesday as investors took in weaker jobs data.
- The private payrolls rose by 152,000 last month, below expectations.
US stocks ticked higher on Wednesday as traders took in soft jobs data and revved up their hopes for Fed rate cuts later this year. All three benchmark indexes ticked higher, while long-dated bond yields slumped.
The 10-year Treasury continued its slide Wednesday, declining by two basis points to 4.308%.
The private sector added fewer jobs than anticipated last month. ADP reported that payrolls rose 152,000 in May versus 1750,000 expected by economists. Meanwhile, annual wage growth remained level at 5% — both promising signs that the job market is cooling
Weaker hiring trends are good news for the outlook for rate cuts. Central bankers have said they're looking for more signs that economic activity is slowing before easing up on monetary policy.
Investors will turn to the more closely watched nonfarm payroll report on Friday. Expectations are for employers to have added about 175,000 jobs last month, though Bank of America notes that it's looking for a reading of 200,000 and for the unemployment rate to fall to 3.8%.
"Whether the Fed can ease policy this year will depend on its confidence on inflation. We continue to expect the first rate cut in December, followed by four 25bp cuts in 2025," BofA analysts wrote in a note on Wednesday.
Investors are largely expecting the Fed to hold interest rates steady at its next policy meeting, but are still feeling bullish on rate cuts by the end of the year. Markets see a 60% chance the Fed could cut rates by 50 basis points or more by year-end, according to the CME FedWatch tool.
Here's where US indexes stood shortly after the 9:30 a.m. opening bell on Wednesday:
- S&P 500: 5,310.17, up 0.37%
- Dow Jones Industrial Average: 38,758.72, up 0.12% (+31.25 points)
- Nasdaq composite: 16,965.94, up 0.65%
Here's what else is going on today:
- Texas is poised to get its own stock exchange with less red tape than the NYSE or the Nasdaq.
- JPMorgan's bearish quant guru says the meme stock resurgence is a bad sign for markets.
In commodities, bonds, and crypto:
- West Texas Intermediate crude oil rose 0.82% to $73.85 a barrel. Brent crude, the international benchmark, was higher by 0.77% to $78.12 a barrel.
- Gold edged higher 0.51% to $2,339.99 per ounce.
- The 10-year Treasury yield fell one basis point to 4.32%.
- Bitcoin climbed 2.89% to $71,012.