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Stocks Mixed: ADP Jobs Drop, Services Sector Surges
5 Dec
Summary
- Stock indexes traded mixed as bond yields fell on weak ADP employment report.
- Chipmakers boosted stocks amid stronger-than-expected earnings forecasts.
- US service sector activity expanded unexpectedly, easing price pressures.
US stock indexes navigated a mixed trading session, with the Dow Jones Industrials seeing gains while the S&P 500 edged higher and the Nasdaq experienced a slight decline. Market sentiment was influenced by a weaker-than-expected November ADP employment report, which showed job cuts for the first time in over two and a half years. This data bolstered expectations that the Federal Reserve might lower interest rates at its upcoming FOMC meeting, leading to a drop in bond yields.
Despite initial downward pressure from labor market concerns, stocks found support from positive developments in the services sector. The November ISM services index exceeded expectations, revealing the strongest pace of expansion in nine months. Furthermore, price pressures within the service sector showed signs of easing, contributing to a more optimistic economic outlook. Tech stocks, particularly chipmakers like Microchip Technology and Marvell Technology, were notable performers, driven by strong earnings forecasts.
