After a sluggish performance in the previous session, stocks predominantly advanced throughout Wednesday's trading day. The major indices reached new record highs at closing, breaking a two-day mixed result streak.
Leading the charge was the tech-centric Nasdaq, which surged by 254.21 points or 1.3%, closing at 19,735.16. The Dow Jones Industrial Average rose by 308.51 points or 0.7%, ending at 45,014.04, while the S&P 500 added 36.61 points or 0.6% to close at 6,086.49.
The Dow's recovery was notably driven by a sharp hike in Salesforce (CRM) shares, which leapt 11% following better-than-anticipated fiscal third-quarter revenue announcements. Similarly, Marvell Technology (MRVL) saw its shares skyrocket by 23.2% after it reported fiscal third-quarter results that surpassed expectations, bolstering the tech sector's performance.
Contributing to Wall Street's strength was renewed optimism about interest rates, fueled by the release of weaker-than-expected U.S. economic data.
Payroll processor ADP reported a smaller-than-anticipated increase in U.S. private sector employment for November, with a rise of 146,000 jobs, following a downward revision of 184,000 jobs in October. Economists had forecasted an increase of 165,000 jobs, compared to the initially reported surge of 233,000 jobs in October.
Furthermore, a report from the Institute for Supply Management indicated a more significant-than-expected slowdown in U.S. service sector growth in November. The ISM services PMI dropped to 52.1 from 56.0 in October. Despite the reading remaining above 50, indicating growth, expectations had been for a more modest decline to 55.5.
In response to these data releases, CME Group's FedWatch Tool now reflects a 75.5% probability that the Federal Reserve will cut interest rates by 25 basis points later this month.
Federal Reserve Chair Jerome Powell, in his afternoon remarks, reassured that the central bank would proceed cautiously with rate cuts, given the ongoing positive economic indicators.
Sector Highlights
Airline stocks rose significantly during the session, with the NYSE Arca Airline Index appreciating by 2.9%. Marked strength was also observed among computer hardware stocks, mirrored by a 2.8% increase in the NYSE Arca Computer Hardware Index. Pure Storage (PSTG) propelled the sector higher, spiking by 22.1% post its favorable fiscal third-quarter results.
Additionally, software, semiconductor, and biotechnology stocks displayed notable strength, further fueling the Nasdaq's ascent. Conversely, energy stocks suffered a notable drop alongside declining crude oil prices. Housing stocks also experienced considerable weakness.
Global Markets
Asian-Pacific stock markets exhibited mixed performances on Wednesday. Japan's Nikkei 225 Index edged up by 0.1%, while China's Shanghai Composite Index declined by 0.4%.
European markets also ended the day with mixed results; the U.K.'s FTSE 100 Index declined by 0.3% whereas France's CAC 40 Index increased by 0.7% and Germany's DAX Index improved by 1.1%.
In the bond market, treasuries recovered from earlier declines, climbing into positive territory by session's end. Consequently, the yield on the benchmark ten-year note fell by 4.3 basis points to 4.180%, after peaking at 4.281%.
Looking Forward
Thursday's focus may center on a report regarding weekly jobless claims, though activity could remain tempered ahead of Friday when the more comprehensive monthly jobs report is due to be released.
