Traders work on the floor of the New York Stock Exchange during afternoon trading on June 3, 2024.
Michael M. Santiago | Getty Images
Stock futures gained as AI-darling Nvidia rose to a new record and weak private labor market data gave investors hope the Federal Reserve might move to lower interest rates later this year.
Dow Jones Industrial Average futures advanced 84 points, or 0.2%. S&P 500 futures climbed 0.3%, and Nasdaq 100 futures rose around 0.5%. Nvidia climbed more than 1% before the opening bell and extended gains from a day earlier which saw the chipmaker rise to a fresh record.
Private payroll data from ADP showed hiring slowed to 152,000 last month, while economists polled by Dow Jones forecast private employers added 175,000. The data is the latest sign of weakness in the labor market that investors hope will give the Federal Reserve enough evidence to cut benchmark interest rates. The latest labor market data sent the benchmark 10-year yield sliding further, adding to weakness seen so far in June.
Traders will also monitor data on services and nonmanufacturing purchasing due Wednesday. After that, attention will turn to weekly jobless claims numbers on Thursday and Friday’s all-important May jobs report.
“We continue to expect cumulative cuts of 50 basis points by year-end, with the first easing move likely at the September meeting,” UBS Global Wealth Management chief investment officer Solita Marcelli wrote on Wednesday. “This potential for looser financial conditions provides a healthy backdrop for stocks.”
Hewlett Packard Enterprise climbed more than 15% after fiscal second-quarter revenue topped Wall Street estimates. CrowdStrike jumped 12% on stronger-than-expected earnings and guidance. Fellow technology firm Meta Platforms climbed 1%.
Gains on Wall Street were limited, however, as some investors worry that weak economic data could signal a broader slowdown and outweigh the impact of lower borrowing costs.
Job opening and labor turnover data from Tuesday morning showed 8.059 million vacancies in April, the lowest level in more than three years. It also came in well below the 8.4 million consensus forecast from economists surveyed by Dow Jones.
On the earnings front, discount retailer Dollar Tree is expected to share results before the bell. Athleisure maker Lululemon is slated to post earnings after the market closes.