Wall Street Edges Higher Approaching All-Time Highs

US labor market

U.S. stocks saw gains on Wednesday as more companies reported stronger-than-expected profits.

The S&P 500 rose by 0.4% in early trading, nearing its all-time high set two weeks ago. The Dow Jones Industrial Average increased by 62 points, or 0.2%, at 9:35 a.m. Eastern time. The Nasdaq composite climbed 0.6%, also approaching its record.

Hewlett Packard Enterprise surged 12.8% following robust sales related to artificial intelligence systems, resulting in better-than-expected profit and revenue for the latest quarter. The company also raised its financial forecasts for the year. Cybersecurity firm Crowdstrike saw a 9.5% increase after similarly exceeding analysts’ expectations.

These gains helped offset a 0.6% decline for Dollar Tree, which met profit expectations but slightly missed revenue forecasts. The retailer is considering selling or spinning off its Family Dollar business. The retail sector has been facing challenges, particularly among lower-income U.S. households struggling with persistent inflation.

Recently, stock market activity has been volatile due to reports suggesting a slowdown in U.S. economic growth amid high interest rates aimed at controlling inflation. Wall Street has been hoping for such a slowdown to reduce inflation and prompt the Federal Reserve to cut interest rates. However, there is a risk of triggering a recession, which could negatively impact stock prices.

A report released Wednesday morning indicated that hiring slowed more than expected last month among U.S. employers outside the government. Additional data later in the morning will provide insights into the performance of the construction, finance, and other sectors within the U.S. services industry.

The upcoming jobs report from the U.S. government on Friday is expected to be a significant market mover. This comprehensive report will offer a broader view than ADP’s private sector-focused data released on Wednesday. Economists anticipate a slight increase in overall hiring. The goal remains to slow job market growth without causing widespread layoffs.

Treasury yields have recently dropped sharply as weaker-than-expected economic reports have heightened expectations for future rate cuts by the Federal Reserve.

The yield on the 10-year Treasury edged down to 4.31% from 4.33% late Tuesday and from 4.60% a week ago.

Internationally, European stock indexes rose, with investors anticipating the European Central Bank to cut interest rates at its Thursday meeting due to concerns about economic sluggishness.

In Asia, stock markets experienced mixed results: indexes fell by 0.9% in Tokyo and 0.8% elsewhere, while Seoul’s index rose by 1%.

Featured Image: Freepik @ wirestock

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About the author: Stephanie Bedard-Chateauneuf has over six years of experience writing financial content for various websites. Over the years, Stephanie has covered various industries, with a primary focus on tech stocks, consumer stocks, health stocks, and personal finance. This stock lover likes to invest for the long-term. Stephanie has an MBA in finance.