Wall Street Rises as Weak Jobs Data Strengthens Rate-Cut Bets
.S. private payrolls fell by 32,000 positions in November, surprising markets that expected a gain of 5,000, according to the ADP report.
Quick overview
- Wall Street closed higher on Wednesday, with the Dow Jones rising 0.86%, the S&P 500 gaining 0.35%, and the Nasdaq Composite advancing 0.17%.
- Weak U.S. private-sector employment data has increased expectations for a rate cut by the Federal Reserve in December.
- Microsoft's shares fell 2.5% amid concerns about AI-related sales targets, impacting the broader tech sector.
- Investors are closely watching upcoming data on personal consumption expenditures and personal income for insights into the rate outlook.
In this context, the Dow Jones rose 0.86% to 47,883.14 points; the S&P 500 gained 0.35% to 6,853.46; and the Nasdaq Composite advanced 0.17% to 23,454.09.
Wall Street closed higher on Wednesday, supported by weak U.S. private-sector employment data that strengthened expectations of a rate cut in December. Monetary optimism managed to offset weakness in Microsoft, which came under pressure amid renewed doubts about demand linked to artificial intelligence (AI).
In this context, the Dow Jones advanced 0.86% to 47,883.14 points; the S&P 500 climbed 0.35% to 6,853.46; and the Nasdaq Composite gained 0.17% to 23,454.09.
Weak Private-Sector Jobs Data Reinforces Rate-Cut Expectations
U.S. private payrolls fell by 32,000 positions in November, surprising markets that expected a gain of 5,000, according to the ADP National Employment Report. In October, the reading had been revised up to show 47,000 new jobs.
“Hiring has been choppy lately as employers face cautious consumers and an uncertain macroeconomic environment. And while November’s slowdown was broad-based, it was driven by a pullback among small businesses,” said Nela Richardson, ADP’s chief economist.
The report added to signs of a cooling labor market, increasing the likelihood that the Federal Reserve will deliver a 25-basis-point cut at its December 9–10 meeting. According to CME FedWatch, the probability of a cut climbed to nearly 90%.
On Friday, markets will closely watch the release of the Personal Consumption Expenditures (PCE) Price Index — the Fed’s preferred inflation gauge — along with personal income and spending data, which are key to assessing the rate outlook.
Kevin Hassett: A Nominee Under Pressure
The Financial Times reported that major Wall Street firms have communicated to the U.S. Treasury their concern that Kevin Hassett — who is being considered to lead the Federal Reserve — might push for aggressive rate cuts to align with President Donald Trump’s preferences.
The Treasury has held private meetings with large market participants to evaluate candidates. Some attendees specifically warned that Hassett could adopt an “overly expansionary” stance if appointed.
Microsoft Weighs on Tech and Drags AI-Linked Stocks
Microsoft shares fell 2.5%, even after the company denied a report by The Information claiming it had lowered internal AI-related sales targets. According to the report, several business units reduced their goals for AI agent products after sales teams failed to meet targets in the fiscal year that ended in June.
- The noise spilled into the broader tech sector: NVIDIA slipped 1% and Broadcom dipped 0.2%.
- Tesla shares rebounded 4% on reports from the Trump administration suggesting accelerated development in the robotics industry — a key growth area for Elon Musk’s company.
- In contrast, Netflix slid 5% a day after Reuters reported that the company submitted a bid for Warner Bros. Discovery, raising investor concerns about its expansion strategy.
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