Traders work on the floor of the New York Stock Exchange during afternoon trading on June 3, 2024.
Michael M. Santiago | Getty Images
The S&P 500 rose Wednesday and was on pace for a record close as Nvidia lead major tech stocks higher. Weak labor market data also gave investors hope the Federal Reserve might move to lower interest rates later this year.
The broad market index traded 0.8% higher, while the Nasdaq Composite advanced 1.6%. The Dow Jones Industrial Average added 40 points, or 0.1%. The S&P 500 last hit a record on May 21 when the index reached closed at the 5,321.41 level. Shares of Nvidia soared more than 4%.
The S&P 500 was on track for a record close on Wednesday.
Private payroll data from ADP showed hiring slowed to 152,000 jobs last month, far below the 175,000 economists polled by Dow Jones expected. The data is the latest sign of weakness in the labor market that investors hope will give the Federal Reserve enough evidence to cut benchmark interest rates.
The odds that the Federal Reserve will lower its current 5.25% to 5.50% fed funds rate as soon as September increased, based on futures contracts traded on the CME.
Traders also regarded data on activity in the services sector. The purchasing managers’ index tracking business services rose more than expected to 53.8 compared to an estimate from Dow Jones that called for 50.7. Attention will turn to weekly jobless claims numbers on Thursday and Friday’s all-important May jobs report.
“We see the S&P 500 reaching 5,500 by year-end amid Fed rate cuts, robust profit growth, and the secular growth trend brought by artificial intelligence,” UBS Global Wealth Management Chief Investment Officer Solita Marcelli wrote in a note on Wednesday.
UBS expects the Fed to cut rates twice this year, providing “a healthy backdrop for stocks,” added Marcelli.
Along with Nvidia, other tech shares were leading Wednesday’s gains. Hewlett Packard Enterprise climbed more than 12% after fiscal second-quarter revenue topped Wall Street estimates. CrowdStrike jumped 11% on stronger-than-expected earnings and guidance.
Fellow technology and artificial intelligence play Meta Platforms added 2%.
Some investors worry that weak economic data could signal a broader slowdown and outweigh the effect of lower borrowing costs. Job opening and labor turnover data from Tuesday morning showed 8.059 million vacancies in April, the lowest level in more than three years.
