Wall Street closed higher on Wednesday as the bond market loosened its grip on the stock market. The S&P 500 rose 34.30 points, or 0.8%, to 4,263.75, bouncing back from a 1.4% drop that sent it to a four-month low. The Dow Jones Industrial Average gained 127.17 points, or 0.4%, to 33,129.55, recovering from wiping out its gains for the year. The Nasdaq Composite rose 176.54 points, or 1.4%, to 13,236.01.
Reports suggested that the US economy may be cooling, easing Treasury yields and providing some relief to the stock market. Additionally, a $5 per barrel drop in oil prices helped alleviate inflation concerns and the possibility of high interest rates.
The employment report from ADP indicated a slowdown in hiring last month, with private employers adding 89,000 jobs, falling short of the expected 140,000. This slowdown in the job market is viewed positively on Wall Street as it could reduce upward pressure on inflation and potentially influence the Federal Reserve to take a more lenient approach to interest rates. Another report revealed a slight decrease in growth for businesses in the US services industry in September, exceeding economists’ expectations.
Benchmark US crude oil dropped $5.01 to settle at $84.22 per barrel, experiencing its largest decline in over a year. Brent crude, the international standard, fell $5.11 to $85.81. The drop in oil prices negatively impacted big oil-and-gas companies, with Exxon Mobil, Chevron, and ConocoPhillips all experiencing losses. Cal-Maine also saw a decline of 7.3% after reporting a significant profit drop compared to the previous year.
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On the positive side, Big Tech stocks provided support to the market after leading it lower the previous day. Tesla saw a 5.9% increase, while Microsoft rose 1.8%, and Alphabet rose 2.1%. These high-growth stocks are particularly sensitive to changes in interest rates, making them significant players in determining market direction.
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