Even a shorter trading session on Wednesday ahead of the U.S. Independence Day market close on Thursday was enough to push the S&P 500 and Nasdaq Composite to new heights. The two indexes benefited from the release of new data that showed a softening economy.
The labor market is showing signs of weakness as pay gains for job-stayers and job movers slowed in June, the US services sector contracted at its fastest pace since 2020, and the private sector saw fewer new jobs added than expected.
Investors took this as an encouraging sign that the Federal Reserve will soon move forward with interest rate cuts. According to LSEG’s FedWatch, investors’ bets on a September rate cut are at 70%.
The S&P 500 closed the day at 5,537.02 after a gain of 0.51% or 28.01 points. The index broke the 5,500 for the first time last week and had its first close at the mark on Tuesday.
Nasdaq saw an even better session thanks to the soaring stock of electric vehicle maker Tesla, which gained 22.5% since the start of the week. It jumped by 159.54 or 0.88% to close at a new record of 18,188.30 points on Wednesday.
On the other hand, the Dow Jones Industrial Average slipped by 0.061% 23.85 points, or 0.06%, to close at 39,308.00 points amid a sellout of healthcare and consumer stocks.