U.S. markets opened higher on Wednesday evening, Beijing time. Following volatility in the previous trading session, investors continued to monitor developments regarding the U.S. and Israel's conflict with Iran. The U.S. ADP private sector employment report showed an addition of 63,000 jobs in February.
The Dow Jones Industrial Average rose 88.50 points, or 0.18%, to 48,589.77. The Nasdaq Composite gained 143.12 points, or 0.64%, to 22,659.81. The S&P 500 increased by 15.06 points, or 0.22%, to 6,831.69.
U.S. Treasury Secretary Scott Bessent stated to media on Wednesday that the U.S. would issue a "series of announcements" to support oil transportation through the Persian Gulf. This followed President Donald Trump's announcement on Tuesday that the U.S. would provide insurance for tankers in the Gulf region and, if necessary, have the U.S. Navy escort them through the Strait of Hormuz.
Following Bessent's comments, the oil price rally that emerged after the outbreak of Middle East hostilities lost momentum on Wednesday. Brent crude futures fell 0.7%, while the West Texas Intermediate contract dropped more than 1%. Both had closed lower from their intraday highs on Tuesday, despite finishing the session with gains exceeding 4%.
Bessent also indicated on Wednesday that the 15% global tariffs announced by President Trump last month would be implemented this week. However, he added that he believed U.S. tariff rates would return to levels seen before a Supreme Court decision overturned the presidential tariff policy "within five months."
President Trump stated on Tuesday that the U.S. would provide risk insurance for all maritime trade passing through the Persian Gulf to encourage the resumption of tanker traffic through the Strait of Hormuz. Shipments through this critical global oil chokepoint had stalled after a commander of Iran's Revolutionary Guard threatened to set fire to vessels attempting to use the passage.
Meanwhile, Israel indicated it had launched another round of strikes against Tehran, with its Defense Minister vowing to "crush" the capabilities of the Iranian regime.
Jim Reid of Deutsche Bank wrote in a report on Wednesday, "We are currently in a phase of watching the headlines, with conflicting news altering market sentiment almost hourly yesterday. From a market perspective, the main issue is that there is no sign of any party intending to de-escalate, and the situation appears to be worsening instead."
European-listed equities also saw a recovery on Wednesday.
James McCann, a senior economist at Edward Jones, noted in a report, "Amid all the noise, long-term investors might begin to see some opportunities in the markets, particularly if we start to see energy prices stabilize and potentially retreat in the coming days and weeks."
On the economic data front, the U.S. ADP report showed private sector employment increased by 63,000 in February, with the January figure revised down to just 11,000.
Payroll processor ADP reported on Wednesday that private sector hiring in February was slightly better than expected, although most of the job gains came from only two sectors.
According to the latest ADP data, companies added a seasonally adjusted 63,000 jobs in February, an improvement from the downwardly revised January figure of 11,000 and surpassing the Dow Jones consensus estimate of 48,000.
Despite the headline beat, the breadth of job growth remained a challenge for the labor market.
The education and health services sector—a consistent driver of job creation—led all industries by adding 58,000 positions for the month. Construction followed, contributing 19,000 jobs. Together, these two sectors offset stagnant growth in most other areas.
Professional and business services lost 30,000 positions, manufacturing shed 5,000 jobs, and trade, transportation, and utilities declined by 1,000. Aside from the information services sector, which added 11,000 jobs, other industries showed little change. Manufacturing employment continued to decline despite President Trump's efforts to use tariffs to bring jobs back to the sector.
Regarding wages, pay gains for job stayers held steady at 4.5%, matching the January rate. However, wage growth for job changers fell to 6.3%, down 0.3 percentage points from the previous month. This brought the financial incentive for changing jobs to its lowest level since ADP began tracking the metric.
Nela Richardson, chief economist at ADP, commented, "We are seeing an uptick in hiring, with wage growth remaining solid, particularly for those staying in their roles. But because hiring is concentrated in just a few sectors, our data shows that job switching is not yielding broad-based wage gains."
Unlike recent months, job creation was concentrated in firms with fewer than 50 employees. This group added 60,000 positions, while large enterprises with 500 or more employees added 10,000 jobs. Medium-sized businesses reported a loss of 7,000 positions.
Job growth has cooled over the past year amid the Trump administration's crackdown on illegal immigration and a slower post-pandemic hiring pace. While companies have been reluctant to increase headcount, layoffs have also remained low.
The report comes amid questions about labor market conditions and persistent concerns over elevated inflation—the latter heightened by the conflict involving Iran and the Middle East.
Recent comments from Federal Reserve officials suggest confidence that the employment situation is stabilizing. Concurrently, worries are growing that rising oil prices could fuel inflation. According to the CME Group's FedWatch tool, traders now expect the first Fed rate cut no earlier than July and have reduced the likelihood of a second cut within the year.
The ADP data precedes the Bureau of Labor Statistics' nonfarm payrolls report due on Friday. Markets anticipate that report will show an addition of 50,000 jobs in February. Unlike the ADP report, the government data includes public sector hiring. Economists expect the unemployment rate to hold steady at 4.3%.
In individual stock news, ARK Invest, the exchange-traded fund firm led by prominent investor Cathie Wood, adjusted several holdings on March 3. The firm increased its positions in some technology and aerospace stocks while reducing others. Among its purchases, ARK bought 138,270 shares of Alibaba Group (BABA), valued at approximately $18.75 million. It also added 62,579 shares of Amazon.com (AMZN), worth about $13 million, following reports that some of its data center operations were affected by regional instability.
On the sell side, ARK reduced its positions in Roku (ROKU), Taiwan Semiconductor Manufacturing Company (TSM), and Baidu (BIDU), selling shares valued at over $31 million, $14 million, and $12 million, respectively.
Comments