In August, private payrolls expanded by 177,000 jobs, versus predictions of 195,000, according to the ADP National Employment report, indicating a deteriorating labour market.
Newly released gross domestic product (GDP) figures revealed that the U.S. economy grew by 2.1% in the second quarter, which was less quickly than an earlier estimate of 2.4% growth.
According to David Russell, global head of market strategy at TradeStation, “we’re back to a place where bad news is kind of good news now.”
The most recent data demonstrates conclusively that the economy is not overheating, which maintains this type of Goldilocks optimism. It returns us to the position where we now don’t have as much concern about more rate increases.
Gains in Visa—up 0.9%—kept the cyclicals-heavy Dow Jones afloat following news that the company and rival Mastercard—up 1.3%—were planning to increase credit-card fees.
Among the other significant movers of the day, HP Inc. fell 7.9% as the producer of personal computers cut its annual projection because of weakening demand.
According to the CME Group’s FedWatch tool, traders’ betting on the Fed keeping interest rates constant in September increased to nearly 91% from 88.5% before the release of the private payrolls and GDP figures, while bets on a pause in November increased to 55% from roughly 52% a day earlier.
U.S. Treasury yields decreased, with the 10-year yield last at 4.1%, approaching a three-week low.
Significant growth stock shares fluctuated between gains and losses. Tesla lost 0.3%, while Apple and Netflix each had gains of almost 1.4%.
Ten of the 11 major S&P 500 sectors rose, with information technology and energy leading gains, up 0.8% and 0.7%, respectively.
Investors now await the personal consumption expenditures price index, the Fed’s preferred measure of inflation, and non-farm payroll numbers due on Thursday and Friday, respectively, for more clues on interest rates.
Trading activity has been light heading into the Labor Day holiday, with full-day volumes below the 20-day average for the past eight sessions. Volumes on Wednesday were at about 3.7 billion by midday.
At 11:38 a.m. ET, the Nasdaq Composite was up 80.95 points, or 0.58%, at 14,024.70, the S&P 500 was up 18.63 points, or 0.41%, and the Dow Jones Industrial Average was up 62.61 points, or 0.18%, at 34,915.28.
Due to a military takeover in Gabon, where the oil producer has operations, Vaalco Energy’s stock dropped 17.8%.
After the creator of Jack Daniel’s whisky failed expectations for sales and earnings in the first quarter, Brown-Forman’s stock dropped 4.5%.