NEW YORK: The S&P 500 and the Nasdaq edged up on Wednesday as a sharp downward revision in US jobs data for the year ended March 2024 indicated a slowdown in the labor market, propping up hopes the Federal Reserve would cut interest rates next month.
A Labor Department report showed US employers added far fewer jobs than was originally estimated for the year through March.
“A deteriorating labor market will allow the Fed to highlight both sides of the dual mandate and investors should expect the Fed to prepare markets for a cut at the September meeting,” said Jeffrey Roach, chief economist at LPL Financial.
Financial markets are currently pricing in a near 70% likelihood of a 25 basis-points interest rate cut by the Fed in September, according to CME’s FedWatch tool.
Eight of the 11 major S&P sectors were trading higher, with materials and energy leading the gains.
Consumer staples sector rose 0.5% to a record high, boosted by a 12.5% surge in Target’s shares after the retailer raised its full-year profit forecast and reported its first increase in quarterly comparable sales in over a year.
The focus is now on the minutes from the Fed’s July policy meeting, expected to be released at 2:00 p.m. ET, at which Chair Jerome Powell hinted at a possible interest rate reduction in September.
Jay Woods, chief global strategist at Freedom Capital Markets, said he would look for any signs of dissension about easing policy in the Fed minutes.
“We want to see if there was dissension, and will this lead to a definitive cut (next month)?” The centerpiece event of the week is the Jackson Hole economic symposium on Friday, at which Powell will speak. Market participants will look for hints in his comments on the pace of monetary policy easing following a batch of mixed economic data recently.
At 11:50 a.m. ET, the Dow Jones Industrial Average fell 30.13 points, or 0.07%, to 40,805.11, the S&P 500 gained 6.44 points, or 0.12%, to 5,603.56 and the Nasdaq Composite gained 23.35 points, or 0.13%, to 17,840.29.
Wall Street’s main indexes closed marginally lower on Tuesday, breaking their recent winning streak.
Risk appetite had returned to global equities last week following sharp declines earlier this month, boosted by the likelihood of rate cuts from the US central bank in September, with all three major US benchmarks now at levels seen before the sell-off.
Among others, TJX Cos rose about 6% after the off-price retailer lifted its annual profit forecast, while Macy’s slipped 11.3% after lowering its annual net sales forecast.
US-listed shares of Chinese e-commerce firm JD.com dropped 4.8% after Reuters reported that Walmart, the company’s biggest shareholder, has sold its entire stake in the firm.
Advancing issues outnumbered decliners by a 2.67-to-1 ratio on the NYSE, and by a 1.65-to-1 ratio on the Nasdaq.
The S&P 500 posted 38 new 52-week highs and one new low, while the Nasdaq Composite recorded 57 new highs and 44 new lows.
Source: Brecorder
