On Wednesday, the major stock market indicators on Wall Street went up. This happened because new information showed that the job market was not as hot as before, and also, the interest rates on long-term U.S. government loans dropped from their highest levels in many years, which made investors feel more positive.
At one point, the interest rate on 30-year government loans went above 5% for the first time since August 2007. The rates on 10-year and 5-year loans also reached their highest levels since 2007.
An expert named Sam Stovall, who is the chief investment strategist at CFRA Research, said, “Investors are concerned that interest rates might keep going up… but some technical signs suggest they could go down, which could make bond and stock prices rise. This might lead to a strong finish for the year in the financial markets.”
Big-name growth stocks like Microsoft, Amazon.com, Nvidia, Alphabet, and Tesla all saw their stock prices go up by anywhere from 1.5% to 4.4%.
Companies in the consumer discretionary sector were the top gainers among the major sectors in the S&P 500, with a 1.4% increase in their stock prices. On the other hand, energy companies didn’t do as well, with their stock prices dropping by 3.0% due to falling crude oil prices caused by concerns about demand.
In terms of job growth, U.S. private companies had their weakest month in over two and a half years in September. According to the ADP National Employment report, only 89,000 new jobs were added in the private sector, which was much lower than the expected 153,000.
Just yesterday, there was surprising news that job openings in the United States increased in August. Now, people are looking forward to the more detailed non-farm payrolls data that’s scheduled to be released on Friday.
Sam Stovall, an expert, said, “The ADP report has given investors a bit of hope for the payroll numbers we’ll get on Friday.”
Additionally, the final reading of S&P Global’s Composite Purchasing Managers’ Index for September turned out to be 50.2, which was slightly higher than the initial estimate of 50.1. However, there’s also data indicating that the U.S. services sector is slowing down.
Traders believe that there’s a high likelihood that interest rates will stay the same in both November and December. According to CME’s FedWatch tool, they’re estimating the probability to be over 81% for November and about 64% for December.
As of 12:03 p.m. Eastern Time, the Dow Jones Industrial Average was up by 75.25 points, or 0.23%, reaching 33,077.63. The S&P 500 had gone up by 20.59 points, or 0.49%, reaching 4,250.04, and the Nasdaq Composite had increased by 126.92 points, or 0.97%, reaching 13,186.38.
Investors were also keeping a close watch on the S&P 500, hoping it would remain above the 4,200-point mark. This level is seen as a key support level in case there’s continued selling pressure on stocks.
