Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., December 1, 2023.
Brendan Mcdermid | Reuters
U.S. stocks rose Wednesday as investors cheered economic data indicating inflation is falling.
The Dow Jones industrial Average traded 86 points higher, or 0.2%. The S&P 500 and the Nasdaq Composite each gained 0.3%.
The advances come on the back of the latest batch of economic data. A drop in labor costs boded positively for the path of inflation, while a jump in productivity signaled the potential for the economy to skirt a recession. Private payroll data from ADP offered the latest indication that the job market, long considered a pain point for the Federal Reserve, was easing.
“ADP’s payroll data shows the Fed’s anti-inflation treatment is now really taking effect,” said David Russell, global head of market strategy at online investing platform TradeStation. “The numbers point toward a soft landing, but investors may start to worry about a recession if policy remains too hawkish. It’s the Fed’s battle to lose at this point.”
Wednesday’s ADP report is the latest in a string of labor-focused data expected over the course of the week. Investors will monitor jobless claims numbers on Thursday, followed by key data on nonfarm payrolls, wages and the unemployment rate on Friday.
Labor costs also fell more than economists expected, while productivity increased at a higher rate than anticipated, new government data showed.
Wednesday’s gains mark a reversal from back-to-back losses for the Dow and S&P 500. The declines raised questions around whether the late 2023 rally was taking a pause or if the market had run up too far, too fast.
But the Nasdaq Composite was able to end higher on Tuesday before extending gains on Wednesday. Technology stocks, which led the November rally, have risen as Treasury yields pulled back.
Cloud company Box tumbled nearly 9% after reporting third-quarter results that came in below analyst expectations. On the other…
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