U.S. stocks were up on Wednesday in anticipation of a possible FED rate hike pause. The main reason is weaker economic data. Investors are waiting for the August job report on Friday.
Optimism Despite Muted Economic Data
At 11.35 ET, all three major indices on Wall Street rose again on Wednesday. The Dow Jones, S&P 500, and Nasdaq were rising by 0.2 to 0.35 percent. The Dow Jones Industrial Average was up 80 points, the S&P 500 was up 15 points, and the Nasdaq was up 60 points.
Winning Streak Continues in U.S. Stocks
Continuing the positive trend in U.S. stocks, major indexes on Wall Street made big gains on Tuesday. The Dow Jones Industrial Average went up almost 300 points (0.9%). The S&P 500, which gives a broad view, rose a notable 1.5%, and the Nasdaq Composite, focused on tech, jumped up by a substantial 1.7%.
Labor Market Insights
The data from Tuesday revealed that there were fewer job openings than people thought. This could mean the job market is becoming more open. Investors are feeling hopeful that the Federal Reserve might decide to stop increasing interest rates at their meeting in September. This optimism comes from slower economic growth and not-so-high inflation, which make investors more confident.
Jobs Report in Focus
Everyone is eagerly waiting for the official jobs report for August, which will come out on Friday. Before this, the ADP private payrolls report showed that in August, employers added fewer jobs (177,000) than they were expected to add. In July, this report said that 312,000 more jobs had been added.
GDP Growth Slows
When experts looked at the newest GDP data again, they saw that the economy didn’t grow as fast as they thought. It only grew by 2.1% from the start of the year, which is slower than they expected. But they had predicted a stronger growth rate of 2.4% for this time.
European Economic Dynamics
The economic situation in Europe, which is important for big U.S. companies, has become difficult. Inflation went up in important parts of Germany in August. So, people worry that the Eurozone’s main economy might keep getting weaker. This puts more pressure on the European Central Bank to keep raising interest rates.
Corporate Earnings and Outlook
On Wednesday, companies like Brown Forman (NYSE: BFb), Salesforce (NYSE: CRM), and Crowdstrike (NASDAQ: CRWD) were set to share their earnings reports. However, Brown Forman didn’t do as well as expected in terms of both revenue and earnings. Also, HP (NYSE: HPQ) saw its stock drop by 10.9% after revising its annual forecast due to a slowdown in demand for personal computers.
Oil Prices and Hurricane Impact
Oil prices saw an increase on Wednesday due to news of a big reduction in U.S. crude oil stocks. This rise happened alongside worries about Hurricane Idalia, which has grown into a Category 4 hurricane and might impact oil production in the Gulf of Mexico.
Even though there are worries about economic data, U.S. stocks are showing strength and positivity. So, investors are paying close attention to the upcoming jobs report and various market factors. At least until now, investors have managed the situation with hopefulness.
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