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Wall Street rises on new Nvidia record as investors wait for rate cuts

Wall Street rises on new Nvidia record as investors wait for rate cuts

The S&P 500 rises this Wednesday, as Nvidia reaches a record and leads the rise of the main technology stocks. The weak labor market data also gave investors hope that the Federal Reserve could reduce interest rates later this year.

The broad US market index climbs 0.5%, while the Nasdaq Composite advances 1.1%. The Dow Jones Industrial Average rises 0.4%.

ADP private payrolls data showed hiring slowed to 152,000 jobs last month, well below the 175,000 economists surveyed by Dow Jones expected. 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.

Odds have increased that the Federal Reserve will cut its current 5.25%-5.50% federal funds rate as early as September, according to futures contracts traded on the CME.

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Traders also looked at data on activity in the services sector. The Purchasing Managers’ Index tracking business services rose more than expected to 53.8 compared with a Dow Jones estimate of 50.7. The focus will be on weekly jobless claims numbers on Thursday and the crucial May jobs report on Friday.

“We see the S&P 500 reaching 5,500 by year-end amid Fed rate cuts, robust earnings growth and the secular growth trend fueled by artificial intelligence,” wrote Solita Marcelli, chief investment officer at UBS. Global Wealth Management, in a note on Wednesday.

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Reuters

UBS Wealth Management expects the Fed to cut rates twice this year, providing “a healthy environment for stocks,” Marcelli added.

Along with Nvidia, other tech stocks are leading Wednesday’s gains. Hewlett Packard Enterprise rose more than 13% after fiscal second-quarter revenue beat Wall Street estimates. CrowdStrike jumped 7% on stronger-than-expected earnings and guidance.

Tech and AI stocks like Meta Platforms and Alphabet are up 1% and 2%, respectively.

Source: Ambito

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