NEW YORK, Dec 4 — United States (US) stocks closed higher on Wednesday after fresh employment figures from Automatic Data Processing, Inc. (ADP) strengthened expectations that the Federal Reserve will cut interest rates next week, reported Xinhua.
The Dow Jones Industrial Average rose 408.44 points, or 0.86 per cent, to 47,882.9. The S&P 500 added 20.35 points, or 0.3 per cent, to 6,849.72. The Nasdaq Composite Index increased by 40.42 points, or 0.17 per cent, to 23,454.09.
Nine of the 11 primary S&P 500 sectors ended in the green, with energy and financials leading the gainers, up 1.83 per cent and 1.27 per cent, respectively. Meanwhile, technology and utilities led the laggards by dropping 0.42 per cent and 0.32 per cent, respectively.
Private payrolls in the US fell by 32,000 in November, according to ADP, defying economists’ expectations of a 40,000 increase.
Despite the weak reading, investors viewed the data as increasing the likelihood of a near-term policy shift. Many traders believe the decline in private-sector jobs will give the Fed added justification to lower interest rates at its final meeting of the year.
Market pricing reflects that sentiment, with the CME FedWatch tool showing an 89 per cent probability of a rate cut next Wednesday, which is far above levels seen in mid-November.
Expectations for a lower-rate environment helped lift major financial stocks such as Wells Fargo and American Express.
Microsoft was a drag on the market, sliding 2.5 per cent after a report from The Information claimed the company had reduced software sales quotas tied to artificial intelligence. Shares pared losses after Microsoft denied making such changes.
Other AI-linked names, including Nvidia, Broadcom, and Micron Technology, also came under pressure. Apple dipped 0.71 per cent. — Bernama-Xinhua
