U.S. stocks rose in the opening session on Wednesday before giving up gains as investors digested fresh economic data and awaited comments from Federal Reserve Chairman Jerome Powell.
The S&P 500 (^GSPC) was down 0.3% in early trade, while the Dow Jones Industrial Average (^DJI) was down 0.6%. The tech-heavy Nasdaq Composite (^IXIC) rose 0.2%.
Stocks fell on Tuesday as concerns over China’s strict zero-Covid policy eased. U.S.-listed Chinese shares rose for a third day as Beijing’s announcement on Tuesday of plans to speed up vaccination of Chinese seniors fueled optimism among investors that COVID restrictions could be eased amid nationwide protests.
The US dollar weakened on Wednesday, with the yield on the 10-year Treasury note falling to 3.733% from 3.755% on Tuesday. In the oil markets, a barrel of the global benchmark Brent oil (BZ=F) increased by 2.3% to $82.90. WTI crude oil (CL=F) rose 2.6% to $80.25 a barrel on Wednesday.
For investors, all eyes will be on Federal Reserve Chairman Jerome Powell’s speech at the Brookings Institution on Wednesday afternoon, his last before the Fed’s next rate-setting meeting in mid-December. Andrew Tyler, head of US Market Intelligence at JP Morgan, wrote that “investors are alternating between preparing for a repeat of Jackson Hole and seeing Powell repeat the sentiments of another Fedspeak.”
As the Fed tries to meet its dual mandate of price stability and maximum sustainable employment, Powell is expected to signal that the Fed is on track to ease the pace of monetary policy tightening slightly, likely down to 50. -base points increase.
The speech also comes less than two weeks before the release of November consumer price data.
“All eyes will continue to be on inflation at this point,” Anthony Saccaro, president of Providence Financial & Insurance Services, told Yahoo Finance Live on Tuesday.
Ahead of Powell’s speech on the plan on Wednesday, US Secretary Janet Yellen touted the Fed’s competence as an institution, saying they were “qualified people trying to exercise their best judgment”.
Earlier in the day, investors learned another wave of macroeconomic data. ADP’s employment report showed that private companies added 127,000 jobs for November, below expectations of about 200,000, in further signs of a cooling labor market.
“Turning points in the labor market can be difficult to capture, but our data shows that Federal Reserve tightening is having an impact on job creation and wage growth,” said Nela Richardson, chief economist at ADP. “Furthermore, companies are no longer in hyper-replacement mode. Fewer people are leaving work and the post-pandemic recovery is stabilizing.”
Also on the data front:
For the third quarter of 2022, US GDP grew 2.9% year over year, according to government estimates. The report also found that the Personal Consumer Expenditure (PCE) index, which measures the price of consumer goods and services, rose 4.3% in the quarter and was revised up by 0.1 percentage point. Excluding food and energy prices, the PCE price index rose 4.6%, also up 0.1 percentage point.
According to the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey (JOLTS), U.S. jobs fell by 10.68 to 10.33 million in October from the previous month. Economists polled by Bloomberg expect monthly job losses of 10.25 million.
Contracts signed for the purchase of existing homes in the U.S. fell 4.6% in October, the fifth straight decline as higher rates fell due to demand, data from the National Association of Realtors showed on Wednesday.
The Chicago Purchasing Managers Index (PMI) fell to a below-expected 37.2 from 47.0, the lowest reading since June 2020.
Finally, the Fed’s Beige Book, the Fed’s survey of regional banks, will be released on Wednesday afternoon.
On the profit front, Salesforce (CRM), Five Below (BEŞ), Okta, Inc. ( OKTA ), Snowflake ( SNOW ) and Victoria’s Secret ( VSCO ) will report earnings on Wednesday.
Shares of CrowdStrike Holdings, Inc. ( CRWD ) missed the cybersecurity company’s forecast quarterly revenue, as clients cut spending and delayed purchases due to macroeconomic headwinds. DoorDash ( DASH ) is laying off about 1,250 people to cut costs, according to Bloomberg, citing CEO Tony Xu.
Dani Romero is a reporter for Yahoo Finance. Follow him on Twitter @daniromerotv
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