U.S. stock investors kept the momentum going Wednesday driving equities higher across the board. There is a growing consensus the Federal Reserve will lower interest rates this year to keep the economy growing.
Continue Reading Below
|I:DJI||DOW JONES AVERAGES||27222.97||+3.12||+0.01%|
|I:COMP||NASDAQ COMPOSITE INDEX||8207.242638||+22.04||+0.27%|
A disappointing ADP jobs report for May -- which showed just 27,000 jobs created versus 180,000 expected -- sparked a bond rally, trimming yields, as investors sought safety more than growth on expectations that the U.S. economy is slowing down. The report, a precursor to the monthly jobs data due on Friday, had some economists weighing in with a view that the red hot job market is cooling off.
"Given the strength we’ve seen in the job market this may raise more than a few eyebrows and adds to the already significant pressure the Fed is feeling to cut rates. It’s the lowest level we’ve seen in the past five years and a far departure from the gangbuster ADP reports we’ve been used to," Mike Loewengart, vice president with E*TRADE Financial Corp., said in a statement.
Offsetting the effect of weak bond yields was a statement on Tuesday from Federal Reserve Chairman Jerome Powell who said the U.S. central bank is watching how global trade developments are impacting the U.S. economic outlook and is prepared to act as necessary to sustain the near-record expansion.
“We do not know how or when these issues will be resolved. We are closely monitoring the implications of these developments for the U.S. economic outlook and, as always, we will act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2 percent objective,” he said in a speech. Powell's comments led to the Dow Jones Industrial Average closing more than 500 points higher on Tuesday and also boosted global equities early Wednesday, with key bourses in Asia and Europe posting gains.
Shares of Big Tech corporations were mixed on Wednesday with Amazon rolling out a number of new initiatives at a conference, including a drone to deliver packages.
Crude oil prices tumbled on increasing U.S. inventories "blind sliding" the market says Phil Flynn, senior energy analyst at The PRICE Futures Group and a FOX Business contributor.
West Texas Intermediate, the U.S. benchmark, fell 3.83 percent to $51.43 per barrel officially entering a bear market, hitting the lowest level since January.