Both the S&P 500 ETF (SPY) and the Nasdaq 100 ETF (QQQ) closed higher on Wednesday, driven by an upbeat Services Purchasing Managers’ Index (PMI) and strength in the financial and energy sectors.
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The two ETFs opened the trading session in negative territory after ADP’s National Employment Report showed that the U.S. private sector lost 32,000 jobs in November, trailing the consensus estimate of 10,000 additions.
There was a noticeable divide between small and larger-sized firms, as companies with 49 or fewer employees lost 120,000 jobs, while companies with at least 50 employees gained 90,000 jobs. Furthermore, the U.S. has now lost an average of 4,333 jobs per month over the past three months, registering the first three-month decline since 2020, according to Creative Planning Chief Market Strategist Charlie Bilello.
“Hiring has been choppy of late as employers weather cautious consumers and an uncertain macroeconomic environment,” said ADP Chief Economist Dr. Nela Richardson.
The market got a boost after ISM announced that November’s Services PMI rose to a nine-month high of 52.6, above the estimate of 52.0 and increasing from 52.4 in October. The index measures the health of the services sector, tracking factors like employment, new orders, and prices paid. A reading above 50 indicates expansion, while a reading below 50 points to contraction.
Employment improved to 48.9 from 48.2, while new orders slipped to 52.9 from 56.2. Prices paid also eased, dropping to 65.4 from 70.0 and signaling cooling inflation pressures. However, the services PMI 12-month average is still at its lowest level since August 2024 and its second-lowest level since June 2010.
Meanwhile, President Trump met with Nvidia (NVDA) CEO Jensen Huang in Washington, D.C., to discuss export controls on AI chips, according to Reuters. “We support export controls,” said Huang. “We should ensure American companies have the best, the first and the most.”
Huang also met with lawmakers to lobby against the GAIN AI Act, which would obligate chipmakers, such as Nvidia and Advanced Micro Devices (AMD), to prioritize U.S. buyers for their top AI chips before supplying China or other countries facing restrictions. Furthermore, Huang warned that differing regulations across U.S. states would hinder AI development.
Finally, key figures across Wall Street have warned Trump against choosing National Economic Council Director Kevin Hassett as his Fed Chair pick. The warnings center on concerns that Hassett’s perceived lack of independence and credibility at the central bank could push long-term interest rates, like the 10-year Treasury yield, higher. Consumer rates, such as mortgages and auto loans, closely track the 10-year yield. In addition, long-term yields could still rise in the event of a lower federal funds rate because they are tied to market expectations for inflation, economic strength, and the Fed’s ability to guide monetary policy effectively.
The S&P 500 (SPX) closed with a 0.30% gain, while the Nasdaq 100 (NDX) returned 0.27%.
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