The S&P 500 and Nasdaq ended higher on Wednesday as new economic data indicated a cooling US economy, reinforcing expectations that the Federal Reserve will pause rate hikes in September.
The S&P 500 hit its highest in almost three weeks after an ADP National Employment report revealed private payrolls rose by 177,000 jobs in August, contrary to predictions of 195,000, indicating a decrease in the labor market.
Since August 1, the Nasdaq has recorded its highest close.
Fresh gross domestic product figures revealed the US economy inflated 2.1% in the second quarter,slower than a preliminary estimate of 2.4% growth.
“Somewhat softer employment data is easing investor concerns for future Federal Reserve interest rate hikes,” said Rob Haworth, a senior investment strategist at U.S. Bank Wealth Management.
According to Haworth, the likelihood of a “softer landing” for the US economy supported demand for growth stocks and other riskier components of defensive stocks.
Nvidia climbed 1% to end at its highest ever. It was Wall Street’s most traded firm, with a value of $35.5 billion traded during the session.
Mastercard and Visa earned almost 0.5% each after a report mentioned the firms were getting ready to increase credit card fees.
HP Inc. slid 6.6% after the desktop maker shaved its annual prediction because of slowing demand.
Traders’ wagers on the Fed leaving interest rates the same in September remained at around 89%, raised from 86% the previous day, while wagers on a halt in November increased to 54% from around 52%, the CME Group’s FedWatch tool revealed.
The US Treasury yields dropped to a near three-week low, with the 10-year yield previously at 4.12%. Volume on US exchanges was light, with 9.0 billion shares traded, compared to an average of 10.6 billion shares over the last 20 sessions.
The S&P 500 rose 0.38% to close at 4,514.87 points.
The Nasdaq earned 0.54% at 14,019.31 points, while the Dow Jones Industrial Average climbed 0.11% to 34,890.24 points.
Of the 11 S&P 500 indexes, nine saw gains. Information technology saw a rise of 0.83%, and energy saw a rise of 0.51%.
Investors are now looking for more indications on interest rates in the personal spending price index, the Fed’s favored gauge of inflation, and non-farm payroll figures, which are coming on Thursday and Friday, respectively.
This week’s trading volume has been modest as the United States celebrates Labor Day on Monday.
Brown-Forman (BFb.N) dropped 4% following the Jack Daniels whiskey manufacturer’s failure to meet first-quarter sales and earnings targets.
Within the S&P 500, rising issues outweighed declining ones by a 1.9-to-1 ratio.
The S&P 500 set 24 new highs and one new low, while the Nasdaq set 70 new highs and 76 new lows.