Stocks got a boost on Wednesday as more signs of a cooling labor market and market participants grew hopeful that the Federal Reserve might cut interest rates sooner than expected. Traders and investors also digested quarterly earnings releases and new economic data.
Let’s start with the economic news. Next Employment Report A weekend turbulence for stock markets has boosted them on Wednesday, as a report of some good news out of bad news about the labor market showed the private sector added 152,000 jobs last month. India That was a sharp slowdown from April’s 188,000 jobs, after economists had expected the ADP survey to show payrolls had risen by 175,000 last month.
The ADP report is “too unreliable to be taken seriously,” said Ian Shepherdson, the company’s chairman and chief economist. Pantheon MacroeconomicsBut that’s in line with the firm’s forecast for a slowdown in hiring in the coming months. “Our Homebase model projects about 150,000 jobs in May, and we are prepared for payrolls to remain below 100,000 through the summer,” the economists wrote.
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The ADP data comes on the heels of a report yesterday that job openings fell to a three-year low of 8.1 million in April, below the 8.35 million economists had expected. Signs that a buoyant labor market is cooling have stoked expectations that the Federal Reserve will cut interest rates by a quarter percentage point for the first time in September. The odds of a September rate cut rose to 59% from 56% yesterday, according to CME Group’s FedWatch tool.
Elsewhere in the economy, rate cut expectations were somewhat tempered by upbeat data from the U.S. services sector, which saw economic activity grow in May after contracting in April for the first time since December 2022, according to the Institute for Supply Management’s Services ISM Economic Report.
“May’s increase came despite a notable uptick in business activity, rapid growth in new orders, slowing supplier deliveries and a continuing contraction in employment,” ISM Services Industry Research Committee chair Anthony Nieves said in a media release.
Stock prices move
In individual stock news, Hewlett Packard Enterprise (HPE) stock is a technology company. Exceeding sales and profit expectations The company reported strong second-quarter results and issued a strong outlook thanks to robust demand for its artificial intelligence (AI) servers.
CrowdStrike Holdings (CRWD, +12%) shares rose again on Wednesday after a strong quarterly earnings report. Not only did the cybersecurity company beat first-quarter revenue and profit expectations, CrowdStrike also raises full-year forecastCRWD’s rally after reports of better-than-expected gains have sent shares soaring is exactly what we’ve seen so far for cybersecurity stocks.In fact, CrowdStrike has been the big winner so far in 2024, up more than 25% year-to-date through early June.
If a Dollar Tree falls in the forest
stock Dollar Tree (DLTR) is a retail chain Strategic Review of Family Dollar BusinessThis could include a sale. Family Dollar to close 970 underperforming stores.
“Consumers staying home has only made Dollar Tree’s losing battle against competitors like Walmart and Dollar General even worse,” wrote Kristin Short, vice president of research. Shortlist“The Family Dollar brand has contributed to our overall poor performance over the past several quarters.”
DLTR shares fell 4.9% during trading hours, making them the second-worst performing stock in the S&P 500 index on Wednesday.
For key indicators, a broader S&P 500 It rose 1.2% to 5,354, but was dominated by tech companies. Nasdaq Composite Index It rose nearly 2% to 17,187. Dow Jones Industrial Average The number of cases increased by 0.3% to 38,807.
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