U.S. stocks opened mixed on Wednesday evening, Beijing time. This came after both the S&P 500 and the Dow Jones Industrial Average hit new record highs. The U.S. December ADP employment data, often referred to as the "small non-farm payrolls," showed an increase in jobs that was lower than market expectations.
The Dow Jones Industrial Average rose by 50.64 points, or 0.10%, to 49,512.72 points; the Nasdaq Composite Index fell by 0.799 points to 23,546.374 points; and the S&P 500 index edged up by 0.25 points to 6,945.07 points. U.S. stocks closed higher on Tuesday. Investors appeared to shrug off the news of the U.S. raid in Venezuela over the weekend. The Dow surged by nearly 485 points, a gain of 0.99%, closing above the 49,000-point mark for the first time. The S&P 500 also rose approximately 0.6%, setting a new closing record, while the tech-heavy Nasdaq Composite Index advanced about 0.7% for the day. Angelo Kourkafas, Senior Global Investment Strategist at Edward Jones, stated, "The market's reaction to the U.S. raid in Venezuela highlights the gap between significant event risk and actual price movements. Although Maduro's arrest is a notable geopolitical event, it has no direct impact on oil supply—which is the factor the market truly focuses on." He added, "Meanwhile, the pro-cyclical rally seen since the start of the week reflects favorable fundamental factors, including the potential for earnings momentum to broaden beyond the mega-cap tech stocks." Nine of the 11 sectors in the S&P 500 closed higher on Tuesday, with healthcare and technology sectors leading the gains. Amazon, a member of the "Magnificent Seven," and Palantir, a favorite among retail investors, both saw their shares rise more than 3%. Data storage-related stocks such as SanDisk, Western Digital, and Seagate were among the top performers in the S&P 500 on Tuesday. Looking ahead, Paul Christopher, Head of Global Market Strategy at Wells Fargo Investment Institute, stated that "social stability" in Venezuela will be key to the direction of U.S. stocks. He said, "If the current government does not cooperate with the U.S., or if the military or opposition loses patience while waiting for elections, we could see a resurgence of the long-simmering social unrest in the country—which would likely have a negative impact on U.S. stocks." Naomi Fink, Chief Global Strategist at Amova Asset Management, commented, "The path ahead will be bumpier than what the market is pricing in. There are numerous global geopolitical tensions at present, yet the market seems to be setting these factors aside for the time being." "The market's reaction to the Venezuela news underscores the divergence between overall risk and actual price action. While Maduro's arrest is a striking geopolitical event, it has no direct bearing on oil supply, which is the element the market genuinely cares about," said Angelo Kourkafas, Senior Global Investment Strategist at Edward Jones. As U.S. military action led to the arrest of Venezuelan leader Maduro, President Trump's intentions regarding Greenland, Denmark's autonomous territory, drew attention in global markets. White House Press Secretary Caroline Levitt said on Tuesday that Trump and his team are considering a "range of options" to acquire Greenland, including "utilizing U.S. military forces." Trump insists that the U.S. needs the Arctic island for national security purposes, and this week he pointed to activities by other nations in the region. In response, both Greenland and Denmark have repeatedly stated that Greenland is not up for grabs. European leaders issued a statement on Tuesday saying, "Greenland belongs to the people of Greenland." Only Denmark and Greenland can decide matters concerning Denmark and Greenland." On the economic data front Wednesday, the ADP report indicated a rebound in employment for December, with private businesses adding 41,000 jobs, falling short of the median market expectation of 47,000. Education and health services, along with leisure and hospitality, led the gains. Nela Richardson, Chief Economist at ADP, stated that the report shows U.S. small businesses recovered from job losses in November, with hiring increasing at year-end, even as larger employers contracted.
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