Rate Cut Hopes Support Market Advance, Private Payrolls Growth Slows in May

Barry Adams
05 Jun, 2024
New York City

Stocks on Wall Street attempted to move higher as investors reviewed the latest update on private payroll and the service sector. 

The S&P 500 index and the Nasdaq Composite advanced in early trading, and the AI chip leader Nvidia soared to a new record high. 

Private payroll expanded by 152,000 in May, according to the latest survey released by ADP. 

The private payroll rose at the slowest pace in four months, and fewer jobs were added compared to the downwardly revised 188,000 in April. 

Most of the job gains were in the service sector, with an increase of 149,000, and goods-producing sector payroll expanded by 3,000 in the month. 

Annual wage gains for those who switched jobs slowed to 7.8%, and for those who continued with their current jobs, they held steady at 5% for the third month in a row. 

A separate report showed that service growth accelerated in May due to faster new order growth and notably higher business activity. 

The service sector's activities expanded at the fastest pace in nine months, according to the latest survey released by ISM. 

The ISM Services PMI in the U.S. jumped to 53.8 in May from 49.4 in April, when it contracted for the first time since December. 

"The majority of survey participants suggested that inflation and the current interest rates are an impediment to improving business conditions,"  Anthony Nieves, chair of the ISM business survey committee, said. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index increased 0.2% to 5,302.60, and the Nasdaq Composite advanced 0.7% to 16,975.08.

The yield on 2-year Treasury notes edged lower to 4.78%, 10-year Treasury notes decreased to 4.34%, and 30-year Treasury bonds edged higher to 4.47%.

WTI crude oil increased $0.34 to $73.60 a barrel, and natural gas prices rose 9 cents to $2.68 a thermal unit.

Gold increased by $16.10 to $2,346.48 an ounce, and silver rose 14 cents to $29.79. 

The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 104.34.

 

U.S. Stock Movers

Hewlett-Packard Enterprise rose 12.4% to $19.79 after the advanced computer system maker reported a better-than-expected fiscal second quarter. 

CrowdStrike Holdings jumped 6.7% to $326.56 after the cyber security firm reported better-than-expected first quarter results and issued a stronger-than-expected outlook for the current quarter. 

Nio Inc. increased 0.01% to $5.22 after the Chinese electric vehicle maker received approval to build its third production facility in China. 

The news was first reported by Reuters but could not be independently verified. 

Deere & Co. declined 0.2% to $368.79 after the farm equipment maker said in a regulatory filing that it plans to trim its "production and salaried workforce" as the company struggles with a global demand slowdown.