U.S. stock indexes on Wednesday were indicated to hold near record levels, in the final session of the month and first half of the year. Investors also weighed economic reports, including a report on private-sector employment, which came in better than expected.
How are stock benchmarks performing?
-
Futures for the Dow Jones Industrial Average
YM00,
+0.02%YMU21,
+0.02%
were off 34 points to reach 34,136, a slip of 0.1%. -
S&P 500 index futures
ES00,
-0.06%ESU21,
-0.06%
was down 4 points, or 0.1%, to 4,278. -
Nasdaq-100 futures
NQ00,
-0.16%NQU21,
-0.16%
were at 14,554, down 9 points, or off 0.06%.
On Tuesday, the S&P 500
SPX,
+0.05%
notched its 33rd record close of 2021, adding 1.19 points, or less than 0.1%, to 4,291.80; the Nasdaq Composite Index
COMP,
-0.22%
advanced 27.83 points, or 0.2%, to a record close of 14,528.33, its 19th record of the year. The Dow
DJIA,
+0.24%
closed up 9.02 points, or less than 0.1%, to 34,292.29.
What’s driving the market?
Stock markets looked to be taking a pause from a rally that has pushed equity indexes to all-time highs on gains in technology and growth stocks. The recent rally has been at least partly fueled by easing fears about the pace of inflation as the economy recovers from the COVID pandemic with benchmark bond yields remaining in a range for several weeks.
Early Wednesday, investors were parsing a monthly report on U.S. private-sector employment that showed that 692,000 jobs were added in June, setting the stage for the more closely followed Labor Department report on Friday.
The Automatic Data Processing Inc.
ADP,
+0.13%
had been expected to show that the U.S. added 550,000 private-sector jobs in June, according to a consensus of forecasts from economists surveyed by Dow Jones and MarketWatch, following a 978,000 gain in May.
The June report said that hiring grew the most in the hospitality sector, which increased by 332,000. Meanwhile, the May employment count was reduced sharply from the initially reported 978,000, though that still left it as the best month since September 2020.
Employment has become a major focus for markets as investors try to determine on how improvements in the labor market could influence the Federal Reserve’s policy plans.
Late Tuesday, Federal Reserve Gov. Christopher Waller told Bloomberg TV that the “unemployment rate would have to drop fairly substantially, or inflation would have to really continue at a very high rate, before we would take seriously a rate hike in 2022,” but added that he is not ruling out such a move, noting that it is appropriate to think about scaling back the Fed’s monthly purchases of $120 billion in assets, starting with a reduction of $40 billion in mortgage-backed securities.
Separately, investors will watch for a reading of manufacturing activity in the Chicago area, the Chicago purchasing managers index for June, due at 9:45 a.m.
A report on pending home sales due at 10 a.m., will be in focus, as well, coming a day after the S&P CoreLogic Case-Shiller National Home Price Index, showed that prices surged at their fastest pace ever in April, as buyers competed for a limited number of homes.
The national home price index recorded an increase of 14.6% over the past year, representing the highest reading since in the more than 30 years of S&P CoreLogic Case-Shiller data. The separate 20-city index, which gauges home prices across a group of major cities across the country, increased at over the past year by 14.9% in April, well past the 13.3% growth recorded the month prior.
Among speakers from the Fed on Wednesday, Atlanta Fed President Raphael Bostic was set to speak at 8 a.m. Eastern, while Richmond Fed President Tom Barkin was scheduled to speak at 1 p.m., after the policy maker said Tuesday he was pretty optimistic that the U.S. labor market would unclog by the end of summer.
Which companies are in focus?
- Xometry Inc. XMTR, an AI-driven marketplace for on-demand manufacturing, said its initial public offering priced at $44 a share, above its proposed price range of $38 to $42.
- LegalZoom.com Inc. LZ, said Wednesday its initial public offering priced at $28 a share, above its proposed price range of $24 to $27 each.
- Broadband provider Wow Internet, Cable & Phone WOW said Wednesday it has entered two agreements to sell five service areas for a total of $1.8 billion.
- Torrid Holdings Inc. CURV, a direct-to-consumer provider of plus-size women’s clothing, upsized its planned initial public offering on Wednesday, with plans to offer 10 million shares priced at $18 to $21 each, up from an earlier plan to offer 8 million shares.
How are other assets faring?
- The yield on the 10-year Treasury note TMUBMUSD10Y was down 1.4 basis points Wednesday at around 1.47%. Yields and debt prices move in opposite directions.
- The ICE U.S. Dollar Index DXY, a measure of the currency against a basket of six major rivals, was up 0.03%, basically flat.
- Oil futures were on the rise, with the U.S. benchmark CL00 up 1.4% at $74 a barrel. Gold futures GC00 were trading 0.4% lower to $1,755.80 an ounce.
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In European equities, the pan-Continental Stoxx 600 SXXP was declining 0.5% while London’s FTSE 100
UKX,
-0.60%
was down 0.5%. - In Asia, the Shanghai Composite SHCOMP closed 0.5% higher and Hong Kong’s Hang Seng Index HSI finished 0.6% lower, while Japan’s Nikkei 225 NIKwas off less than 0.1%.
