US stocks opened lower on Wednesday evening Beijing time, with Bitcoin extending its recovery from recent heavy sell-offs. Investors assessed the US economic outlook as November's ADP private payrolls unexpectedly declined by 32,000, signaling a contraction in the labor market.
The Dow Jones Industrial Average fell 38.03 points, or 0.08%, to 47,436.43; the Nasdaq Composite dropped 111.59 points, or 0.48%, to 23,302.08; and the S&P 500 declined 17.51 points, or 0.26%, to 6,811.86.
Pre-market ADP data revealed an unexpected drop of 32,000 in US private-sector employment for November, driven largely by significant layoffs at small businesses. Firms with fewer than 50 employees cut 120,000 jobs, while larger companies with 50 or more workers reported a net increase of 90,000 jobs. Economists surveyed by Dow Jones had anticipated a gain of 40,000 jobs.
Separate data showed US import prices remained flat month-on-month in September, contrary to economists' expectations of a 0.1% rise. The Bureau of Labor Statistics reported that import prices were unchanged in September after a 0.1% increase in August. The median forecast from 23 economists had projected a 0.1% rise, with estimates ranging from a 0.4% decline to a 0.5% increase.
Year-on-year, import prices rose 0.3% in September. Non-petroleum import prices increased 0.2% month-on-month, matching August's growth. Export prices were flat month-on-month after a 0.1% rise in August, while climbing 3.8% year-on-year.
Marvell Technology shares surged as Wall Street reacted positively to its data center growth outlook.
Retailer American Eagle Outfitters raised its full-year forecast, citing a strong start to the holiday shopping season.
US stocks closed higher on Tuesday, led by tech stocks like Nvidia and Bitcoin, which rebounded after its worst single-day performance since March. Bitcoin continued its rally on Wednesday, surpassing $93,000.
Investors are evaluating the potential for a year-end rally in US equities. Historically, December has been a strong month for stocks, and November's profit-taking sell-off has compressed valuations of some high-growth stocks, creating buying opportunities.
Traders remain optimistic about corporate earnings and await the Federal Reserve's rate decision on December 10. According to the CME FedWatch Tool, markets now price in an 89% chance of a rate cut at next week's policy meeting, significantly higher than mid-November expectations.
The November ADP report will provide further insight for the Fed's decision-making.
Wells Fargo chief equity strategist Ohsung Kwon noted, "I believe earnings from AI-related companies will remain robust... We’ll see more contributions from beaten-down sectors, and we’re already observing better pricing power in shorter-cycle industrial industries and harder-hit segments. I don’t think we’re in a bubble yet."
Comments