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Nasdaq 100, Dow Jones, S&P 500 News: Anticipated Rate Cuts, NVIDIA Boosting Tech Sector

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U.S. Stocks Mostly Higher on Wednesday

The major U.S. stock indexes are mixed but mostly higher on Wednesday, led by gains in the benchmark S&P 500 Index and the tech-heavy Nasdaq Composite. The S&P 500 rose as Nvidia hit a record high and weak labor market data suggested the Federal Reserve might lower interest rates later this year.

At 14:33 GMT, the Dow Jones Industrial Average is trading 38585.93, down 125.36 or -0.32%. The S&P 500 Index is at 5305.64, up 14.30 or +0.27% and the Nasdaq Composite is trading 16987.56, up 130.52 or +0.77%.

Biggest Drags on the Dow

Cisco Systems Inc. was the biggest drag on the Dow, falling 2.85% to $46.07. Walt Disney Co. also struggled, losing 1.87% to close at $101.39. Johnson & Johnson, McDonald’s Corp., and Travelers Companies Inc. saw significant declines, with each dropping over 1%. These losses tempered gains in the broader market.

Nvidia Boosts S&P 500 and Nasdaq

Nvidia’s record performance was a highlight, driving the S&P 500 and Nasdaq higher. The optimism around AI technologies has positioned Nvidia as a key player, influencing broader market sentiment. Other tech shares also contributed to the gains, with Hewlett Packard Enterprise jumping over 13% and CrowdStrike climbing 7% on strong earnings and guidance.

Labor Market Data Impact

Private payroll data from ADP showed hiring slowed to 152,000 jobs last month, below the 175,000 expected. This weaker-than-expected data pushed the 10-year Treasury yield down to 4.31% from last week’s 4.62%. The market now sees a higher probability that the Federal Reserve will cut interest rates by September, based on futures contracts traded on the CME.

ISM Services PMI Exceeds Expectations

The ISM Services PMI rose to 53.8, exceeding expectations of 50.7. This data indicates a stronger-than-anticipated performance in the services sector, which is a positive signal for the economy. However, upcoming weekly jobless claims and Friday’s key May jobs report will provide further clarity on economic conditions.

Market Forecast

Given the current trends, the S&P 500 is likely to reach 5,500 by year-end, driven by potential Fed rate cuts, strong profit growth, and the ongoing impact of artificial intelligence. UBS Wealth Management anticipates two rate cuts this year, creating a favorable environment for stocks. However, concerns about weak economic data and a potential broader slowdown could limit gains.

Traders should stay alert to further economic reports and Federal Reserve actions, which will be crucial in shaping market movements in the coming months.

Technical Analysis

Daily E-mini Nasdaq-100 Index

E-mini Nasdaq-100 Index futures are higher on Wednesday, putting the tech-weighted index within striking distance of the record high reached on May 23 at 19023.25.

Right now, it’s all about momentum with the index well supported at the price cluster formed by the 50-day moving average at 18241.76 and the swing bottom at 18241.25.

This article was originally posted on FX Empire

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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