4:20pm: AI buzz sparks market gains
Stocks surged to fresh record highs on Wednesday, buoyed by gains in technology stocks as companies highlighted the transformative impact of artificial intelligence on their businesses.
The tech-heavy Nasdaq led the charge, jumping 254.21 points, or 1.3%, to 19,735. The Dow Jones climbed 309 points, or 0.7%, to close at 45,014. The S&P 500 gained 37 points, or 0.6%, ending the day at 6,086.
Investors cheered as major tech firms outlined how the AI boom is reshaping their growth strategies, pushing the sector higher and helping drive broader market gains.
In the bond market, prices for the 10-year U.S. Treasury rose, sending yields down to 4.20% from 4.23% on Tuesday. Bond yields and prices move inversely to one another.
The rally underscores continued optimism about the economic potential of AI, even as investors remain attuned to shifts in interest rates and broader macroeconomic conditions.
3:25pm: Semiconductor strength
Semiconductor names are showing signs of life today, Chris Beauchamp, Chief Market Analyst at online trading platform IG noted.
“Having notably underperformed the broader US indices of late, it might be the turn of semiconductor stocks to lead the drive to fresh highs once more," Beauchamp wrote.
"It’s not as if US indices have needed much help given the latest record highs, but with the Fed continuing to ease policy, the environment for the classic risk-on sector seems to be getting brighter.”
3:00pm: Powell highlights resilient economy
Federal Reserve Chair Jerome Powell said that the US economy’s resilience allows for cautious interest rate decisions.
Speaking at a New York Times event, Powell noted the economy’s strength supports a measured approach to rate cuts, despite expectations for a third reduction this year.
While the Fed began lowering rates in September due to cooling inflation and job growth, borrowing costs remain high, tied to elevated 10-year Treasury yields.
Powell also highlighted uncertainty surrounding potential inflationary pressures from President-elect Donald Trump’s proposed tariffs, which could influence Fed policy if enacted, though specifics on their impact remain unclear.
1:48pm: ADP report 'a bit soft'
Some thoughts on today's ADP Employment Report for November from Comerica's Bill Adams.
As a reminder, private employers added 146,000 jobs in November, aligning closely with the consensus forecast of 150,000.
However, October's private payroll growth was revised downward to 184,000 from the initially reported 233,000. As a result, the net employment gain from last month’s report to this month’s report stands at a weaker 97,000.
Adams called the report "a bit soft."
"ADP didn’t report a drag on job growth in October from the Hurricanes and other one-off drags, so we had expected some softness in the November report as their data began to reflect those effects with a delay," he wrote.
"The Bureau of Labor Statistics jobs report was much weaker than ADP’s in October, so it will likely show a rebound of job growth in November as temporary headwinds abated."
12:44pm: Stocks riding high
Stocks are continuing to show positive momentum at the midday mark.
The Dow Jones is up 175 points, or 0.4%, at 44,881. The S&P 500 is up 0.4% at 6,072 and the Nasdaq leads the charge, adding 183 points (0.9%) to reach 19,664.
Meanwhile, the Russell 2000 is up 0.3%, settling at 2,424.
Investor sentiment appears strong, with all major indices in the green as they build on earlier gains.
12:15pm: Trump names Peter Navarro as trade nominee
President-elect Donald Trump has appointed Peter Navarro as senior counselor for trade and manufacturing in his second administration.
A former trade adviser during Trump’s first term, Navarro was convicted of contempt of Congress for defying a subpoena related to the January 6 Capitol attack and served four months in prison.
Known for his criticism of China and fiery rhetoric, Navarro, 75, previously advocated tariffs and trade reforms.
A Harvard-educated economist, Navarro also faced controversy for comments targeting US allies during his prior tenure in the White House.
11:28am: Salesforce leading agentic AI cycle
Salesforce Inc (NYSE:CRM, ETR:FOO)'s third quarter report suggests the company is leading the way in the agentic AI cycle with Agentforce, according to Bank of America analysts who raised their price target on the stock post-earnings.
Management commentary suggests meaningful customer interest in Agentforce, which allows users to build and customize AI agents, since its release in October, analysts noted.
“Agentforce was included in 200 deals at the end of the quarter, only one week since generally available, underscoring healthy early interest,” they wrote.
“Commentary suggests meaningful pipeline builds for Agentforce for both Service and Sales. The release of Agentforce for sales in 2025 is likely to provide a catalyst for deal closure in the coming quarters.”
The analysts repeated their ‘Buy’ rating on Salesforce and raised their price objective to $440 to reflect an acceleration in its core business from agents and multi-cloud strength and continued margin expansion. Shares of Salesforce traded up 9.2% at about $361.50 late morning on Wednesday.
10.50am: Services sector growth eases
Growth in the US services sector eased last month, according to the ISM survey, but price inflation remained elevated.
The ISM services index dropped to 52.1 for November from 56 the month before, and well below the 55.5 expected.
“Fourteen industries reported business activity growth, and 13 indicated new orders expansion; both figures are improvements compared to October,” said ISM survey chairman Steve Miller.
“This reinforces the view over the last several months that the services sector has returned to sustained growth,” he added in a statement.
Economist Ruben Gargallo Abargues at Capital Economics said the fall in the main index back to levels last seen in August is "not too concerning" as it was driven partly by a slump in the supplier deliveries index.
"But it does lend some support to our view that GDP growth will slow in the next couple of quarters."
A fall in the employment sub-index suggests labour market conditions "continue to loosen, but not collapse", while new orders and business activity sub-indices both dropped back but remained relatively high by recent standards.
The prices paid index was little changed at 58.2, which Gargallo said was "still somewhat elevated reading is unlikely to be welcomed by the Fed, as it is potentially another sign that the downward trend in PCE supercore inflation has stalled".
He said the non-farm payrolls data on Friday and CPI data next week "will be the key releases that determine whether the Fed proceeds with another 25bp cut this month".
It was water off a duck's back for stock markets, with the S&P 500 up 0.35% and the Nasdaq now with gains of just under 1%, setting a new intraday high of just over 19,675.
10.25am: Crypto growth this year
Digital assets have swelled 47% in value in the first 10 months of the year, reaching $2.5 trillion, according to Houlihan Lokey (NYSE:HLI) latest digital assets and blockchain update.
Bitcoin (BTC) trading volumes have increased by 68% compared to last year, helped by the launch of several spot BTC exchange-traded funds at the start of the year, which have attracted $17.3 billion in net inflows.
Cryptocurrencies are increasingly correlated with US equities, Houlihan Lokey (NYSE:HLI) says, noting that both BTC and ether often drop or rise sharply, in line with the S&P 500, during key macroeconomic events, as seen when both equities and crytpo tumbled in the wake of a weaker-than-expected US jobs report in early August.
Looking at new competitors in the market, the report highlights Solana and Polygon as "challenging ethereum with faster transaction times and lower fees, intensifying competition", while stablecoins such as Tether (USDT) have grown rapidly and act "as a safe haven during periods of market volatility".
9.50am: Wall Street starts higher
Wall Street has started Wednesday in a bright and breezy mood, with tech stocks driving gains.
The S&P 500 climbed 0.3% in early trading, while the tech-powered Nasdaq Composite rose 0.7% - both notching new record intraday highs.
This was just ahead of the Dow Jones Industrial Average, which added 0.6%, and the small-cap Russell 2000, which added 0.4%.
A 10% jump in Salesforce Inc (NYSE:CRM, ETR:FOO) shares saw it lead the Dow and S&P leaderboards.
This followed earnings from the customer relationship management software group posted third quarter revenue above market expectations overnight.
9.20am: GM takes $5B-plus China hit
Shares in General Motors Company (NYSE:GM) are little changed pre-market after the Chevrolet, Buick and Cadillac maker warned of a "material loss in value" of its investments in China, forcing it into taking an accounting charge of up to $5.6 billion.
A temporary impairment of its stake in its China joint venture of between $2.6 billion and $2.9 billion is being made, plus an additional $2.7 billion due to the cost of restructuring that the company flagged earlier in the year.
GM, which has a 50% ownership with China's state-owned SAIC Motor Corp and an associated motor finance company, said in a SEC filing that its audit committee submitted a report this week that showed "a material impairment" of the company’s interest in the JV was required, as they are expected to be "other than temporary".
8.55am: Ignore the ADP
"We recommend disregarding ADP’s estimate due to its woeful recent track record," says economist Samuel Tombs at Pantheon Macroeconomics.
The market seems to have largely done that.
He noted that since ADP overhauled its methodology in August 2022, the average absolute error of its estimate of initial private payrolls has has been "a hefty 90K", with a huge range of misses above and below the official figure.
"The first estimate of a 233K increase in private payrolls in October proved to be especially misleading, completely failing to reveal the disruption caused by strikes and hurricanes, as well as an underlying slowdown in the data."
Accordingly, Tombs is continuing to forecast that Friday will see a 250K increase in non-farm payrolls for November (the consensus forecast is for around 200K).
"That would be consistent with a further slowing in underlying employment growth, assuming negligible revisions to October’s data, and likely would steer the FOMC to easing policy at a third straight meeting later this month."
8.45am: ADP jobs report misses forecasts
Stock futures have edged higher and Treasury yields were pared slightly after the release of the ADP payrolls survey.
US private payrolls increased by 146,000 in November, according to the ADP National Employment Report, not quite as much as the forecast 150,000 gain.
Annual pay was up 4.8% year-over-year, the first increase in year-over-year pay in 25 months for 'job stayers', while for people moving jobs, pay gains rose to 7.2%.
October's payrolls were also revised down to 184,000 from 233,000.
"While overall growth for the month was healthy, industry performance was mixed," said Nela Richardson, chief economist at ADP.
"Manufacturing was the weakest we've seen since spring. Financial services and leisure and hospitality were also soft."
7.35am: Further gains expected for Nasdaq and S&P 500
Wall Street looked set for a bright start to the day on Wednesday, a day after both the S&P 500 and Nasdaq notched up record closing values.
Futures had the Nasdaq and S&P 500 adding 0.6% and 0.3% respectively to build on the record highs, while the Dow Jones was seen up 0.5%.
Figures on Tuesday shown an increase in job openings through October, with Wednesday’s ADP payrolls data set to bring further focus on the jobs market.
“Markets will be looking for signs of economic strength to build on the perception that the country is moving into a phase that will see businesses boom under Trump’s Presidency,” Scope Markets analyst Joshua Mahony commented.
Company-wise, GameStop Corp (NYSE:GME) and Synopsys Inc (NASDAQ:SNPS, ETR:SYP) were among those in line to report on Wednesday.