Stocks ended higher Wednesday, with all three major indexes closing at record highs, boosted by a tech sector surge and positive comments from Federal Reserve Chairman Jerome Powell.
The Dow Jones Industrial Average climbed 69%, or 308 points, to end the session above 45,000 for the first time ever, while the S&P 500 rose 0.61% for a fresh closing high of 6,086.49 and the tech-heavy Nasdaq gained 1.3% to a record 19,735.12.
Salesforce surged after beating quarterly revenue forecasts, as did Marvell, which topped earnings expectations and issued strong fourth-quarter guidance.
Powell said during the NY Times DealBook summit that the economy is stronger now than the central bank had expected in September when it began reducing interest rates, and appeared to signal his support for a slower pace of interest-rate cuts ahead, Reuters reported.
“The U.S. economy is in very good shape and there’s no reason for that not to continue ...the downside risks appear to be less in the labor market, growth is definitely stronger than we thought, and inflation has come in a little higher," Powell said "So the good news is that we can afford to be a little more cautious as we try to find neutral.”
His remarks during the half-hour interview that touched only lightly on monetary policy and the economy are likely his last before the Dec. 17-18 policy meeting, as the quiet period when Fed officials refrain from speaking about monetary policy ahead of a meeting starts on Saturday.
Updated at 12:45 PM EST
Powell on deck
Stocks are holding gains into the afternoon session, with Fed Chair Powell's remarks to the NY Times DealBook summit on deck, following a busy morning of earnings and data on Wall Street.
The S&P 500 was last marked 20 points, or 0.34% higher in the session after hitting a fresh intra-day high of 6,075.73 points earlier in the session.
When the S&P 500 achieves over 35 highs in a year, the median gain the following year is 5.8%, below the long-term average of 8.1%,
— Mike Zaccardi, CFA, CMT 🍖 (@MikeZaccardi) December 4, 2024
and in years with 50+ highs, the index has risen only two of seven times, with a median loss of 6.2%. -@NDR_Research https://t.co/VhsHOi7FKC pic.twitter.com/iAKgzK16x1
Updated at 11:05 AM EST
Tragic event
UnitedHealthcare CEO Brian Thompson was shot and killed while heading to a UnitedHealth Group (UNH) investor day event in Manhattan.
Multiple media reports suggest the killing was a targeted attack, and occurred just after 7 am Eastern time near the Hilton hotel where the UnitedHealth event was scheduled.
Company officials have yet to confirm the tragedy, and were not immediately available for comment when contacted by TheStreet.
Related: UnitedHealth executive reportedly killed in Manhattan
Updated at 9:36 AM EST
Record open
The S&P 500 was marked 19 points, or 0.33% higher in the opening minutes of trading, while the Nasdaq gained 120 points, or 0.52%.
The Dow jumped 280 points while the mid-cap Russell 2000 gain 7 points, or 0.21%.
So far this week we’ve seen mixed jobs data—job openings surprised to the upside on Tuesday, but today’s ADP payroll total was weaker than expected," said Chris Larkin, managing director for trading and investing at E*Trade from Morgan Stanley.
"As usual, the government’s monthly jobs report on Friday will break any ties. In the meantime, though, markets may be more interested in any comments Fed Chair Powell may make this afternoon about the future pace of rate cuts," he added. "Right now, the odds favor another cut this month followed by a pause in January, but a significant change in the jobs landscape could rearrange those puzzle pieces."
S&P 500 Opening Bell Heatmap (Dec 04, 2024)$SPY +0.28%🟩$QQQ +0.66%🟩$DJI +0.48%🟩$IWM -0.03%🟥 pic.twitter.com/bAQTfFMurN
— Wall St Engine (@wallstengine) December 4, 2024
Updated at 8:29 AM EST
Slow (pay)roll
The U.S. economy saw softening private sector job creation last month that could boost the case for a final Federal Reserve rate cut.
Payroll processing group ADP said around 146,000 jobs were created in the private sector last month, a decrease from the downwardly revised tally of 188,000 in October.
Job stayers, meanwhile, saw their first year-on-year increase in pay in more than two years, but still lag the gains posted from those seeking new positions.
Stock futures added to gains in the wake of the ADP release, with the S&P 500 called 18 points higher and the Nasdaq set for a 150-point advance at the start of trading. The Dow is priced for a 165-point gain.
⚠️SUMMARY OF US NOVEMBER ADP JOBS REPORT:
— Jesse Cohen (@JesseCohenInv) December 4, 2024
1. The U.S. economy added a lower-than-expected 146,000 jobs in November, as per ADP, missing forecasts for a gain of 166,000.
2. That follows a downward revision for October, which added 184,000 jobs, compared to a previously… pic.twitter.com/BNKuU4gs6f
Updated at 6:46 AM EST
GM stock slides
General Motors (GM) shares slumped in early trading after the carmaker said it would take a more than $5 billion hit to its fourth quarter earnings tied to its joint venture in China.
GM said it would book a charge of between $2.6 billion and $2.9 billion, while writing down the value of its venture with SAIC Motors by $2.7 billion, adding that the writedowns "address market challenges and competitive conditions" as well as "the finalization of a new business forecast."
GM shares were marked 3.2% lower in premarket trading to indicate an opening bell price of $51.94 each.
🚗📉 GM to take over $5 billion in charges on China operations
— PiQ (@PiQSuite) December 4, 2024
Tickers of interest: $GM
General Motors announced non-cash charges exceeding $5 billion for restructuring and reduced valuation of its China joint venture.
The automaker cited unsustainable market conditions,… pic.twitter.com/RMmrvO0pfx
Stock Market Today
Stocks ended higher on Tuesday, with both the S&P 500 and the Nasdaq grinding out modest advances to reach fresh all-time highs as investors looked to today's Powell speech and further toward Friday's November jobs report to get a read on the Federal Reserve's rate path.
The market's broader bullish tone, with the S&P 500 now up for ten of the past eleven sessions, is being powered by the prospect of a business-friendly administration under President-elect Donald Trump, a resilient economy and the profit-boosting effects of the new AI investment wave.
That has put both this week's job data, which include payroll processing group ADP's National Employment report prior to the opening bell as well as Powell's afternoon speech, in sharp focus.
Solid employment data that doesn't stoke inflation concerns could keep the Fed on track for its end-of-year rate cut, adding further support for stock gains into the final weeks of the year.
"Market momentum could continue [in December] for stocks as historically it has been a good month for stock market seasonals," said George Smith, portfolio strategist for LPL Financial.
"These strong returns are historically often back-end loaded; hence the 'Santa Claus Rally' market axionym that describes the idea that the final few days of December are a strong period for stocks."
Related: What's next for stocks after S&P 500 record high?
Heading into the start of the trading day on Wall Street, futures contacts tied to the S&P 500 suggest a 14-point opening-bell gain while those linked to the Nasdaq are priced for a 120-point bump.
The Dow Jones Industrial Average is called 200 points higher thanks in part to a 13.5% surge for Salesforce (CRM) , which posted stronger-than-expected third-quarter earnings and lifted its full-year revenue forecast.
In Europe, markets were higher heading into what is likely to be a successful vote of no confidence in France's parliament, which would topple Prime Minister Michel Barnier's government and deepen the country's budget crisis.
The euro is trading just under 1.05 to the US dollar as all await the vote in the French National Assembly. Risk spreads are relatively calm so far this morning. #economy #markets #france #currency #trading. pic.twitter.com/3qyGiImIGA
— Mohamed A. El-Erian (@elerianm) December 4, 2024
The regional Stoxx 600 benchmark was last marked 0.1% higher in midday Frankfurt trading, while Britain's FTSE 100 slipped 0.37% in London.
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Overnight in Asia, South Korea's Kospi index fell 1.44% in Seoul following yesterday's martial law debacle, which is likely to lead to renewed impeachment proceedings against President Yoon Suk Yeol.
The regionwide MSCI ex-Japan benchmark was marked 0.12% higher into the close of trading, with the Nikkei 225 rising 0.07% by the end of the session in Tokyo.
Related: Veteran fund manager sees world of pain coming for stocks
