On Wednesday, U.S. stocks increased as investors welcomed economic data that showed inflation is declining.
The Dow Jones Industrial Average increased by 0.3%, or 102 points, during trading. Both the Nasdaq Composite and the S&P 500 increased by 0.3%.
The improvements are based on the most recent set of economic data. A decrease in labour expenses portended well for the trajectory of inflation, whilst an increase in productivity suggested that the economy would avoid going into recession. ADP’s private payroll figures was the most recent evidence that the labour market, which the Federal Reserve has long viewed as a source of discomfort, was improving.
David Russell, global head of market strategy at online investment platform TradeStation, stated, “ADP’s payroll data confirms the Fed’s anti-inflation prescription is now actually having effect.” Although all the data suggests a soft landing, if policy stays overly aggressive, markets might begin to fear a recession. Right now, the Fed has the war to lose.
The latest in a series of labor-related data releases anticipated this week is Wednesday’s ADP report. Thursday’s jobless claims data will be closely watched by investors, and on Friday, important information on wages, nonfarm payrolls, and the unemployment rate will be released.
According to recent government data, productivity grew faster than predicted and labour expenses decreased more than analysts had predicted.
The Dow and S&P 500 saw consecutive losses before turning things around on Wednesday. The setbacks made many wonder if the market had gone up too quickly or if the late 2023 boom was just pausing.
Nonetheless, Tuesday’s close saw the Nasdaq Composite rise, and on Wednesday, it continued to rise. Treasury yields declined, which helped technology equities, which drove the November rise, perform better.
Source (CNBC)
