Wall Street Rally Continues, Stocks Approach Record Highs/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stocks drifted higher Wednesday, moving Wall Street closer to all-time highs amid a mix of earnings and economic signals. The S&P 500 gained 0.3%, while bond yields fell after weak private hiring data raised hopes of a Federal Reserve rate cut. Investors remain optimistic but cautious as trade tensions, tariffs, and labor concerns weigh on broader market momentum.
Wall Street Momentum: Quick Looks
- Indexes Push Higher: S&P 500 gains 0.3%, Dow up 94 points, Nasdaq rises 0.3%.
- Hewlett Packard, Wells Fargo Lead Gains: HP posts strong earnings; Fed lifts Wells Fargo restrictions.
- Jobs Data Misses Forecasts: ADP shows just 37,000 private jobs added in May.
- Fed Rate Cut Hopes Renewed: Traders expect rate cuts as hiring slows, Trump pressures Powell.
- Bond Yields Decline: 10-year yield falls to 4.40%, two-year slips to 3.91%.
- CrowdStrike Falls Despite Profit Beat: Revenue and forecast miss hurt shares, drop nearly 8%.
- Global Markets Rise: European, Asian indexes rally amid hopes for tariff resolutions.
- Trump-China Trade Friction Persists: Trump calls Xi “very tough,” casting doubt on quick deals.
- South Korea Political Shift Boosts Kospi: New liberal president prioritizes economic growth and U.S. relations.
Deep Look: Wall Street Gains Again, Nears Record on Mixed Economic Signals
NEW YORK — Wall Street inched higher again Wednesday morning, fueled by optimism around corporate earnings and the possibility of a Federal Reserve rate cut. The S&P 500 rose 0.3% in early trading, narrowing the gap to its record high to just 2.5%. The Dow Jones Industrial Average added 94 points, while the tech-heavy Nasdaq climbed 0.3%.
Corporate Leaders Lift Indexes
Earnings from key companies helped set the tone. Hewlett Packard Enterprise surged 4.1% after beating Wall Street profit expectations, while Wells Fargo jumped 2.8% after the Federal Reserve removed restrictions tied to past banking misconduct. That action marked a significant milestone for the bank, which has spent years working to rebuild public trust.
Labor Market Shows Weakness, Fuels Fed Speculation
Much of Wednesday’s focus, however, shifted to fresh labor market data. Payroll processor ADP reported that private employers added just 37,000 jobs in May, far below the expected 110,000. The reading marks the weakest growth since March 2023 and raised new concerns about hiring momentum.
Though ADP’s figures often diverge from the official U.S. Labor Department numbers due out Friday, investors took the weak report as a sign that the Federal Reserve may need to cut rates to keep the economy on track.
“This may be the tip of an iceberg, but it also could be a false start,” said Carl Weinberg, chief economist at High Frequency Economics. “Either way, traders are reacting cautiously.”
Trump Applies Pressure on the Fed
President Donald Trump quickly seized on the data to pressure Fed Chair Jerome Powell.
“Too Late Powell must now LOWER THE RATE,” Trump posted on Truth Social. “He is unbelievable!!! Europe has lowered NINE TIMES!”
While the Fed has held interest rates steady so far in 2025, Powell and central bankers are carefully watching the impact of Trump’s latest round of tariffs. The concern: slashing rates too early could fuel inflation, even as economic growth softens.
Treasury Yields Retreat
The weak job data helped push Treasury yields lower. The 10-year U.S. Treasury yield dipped to 4.40% from 4.46%, while the two-year note — more closely tied to Fed expectations — dropped to 3.91% from 3.96%.
Recent rate volatility has also been driven by investor concerns over rising U.S. debt. Proposed tax cuts could add trillions to the national deficit, making some investors demand higher yields to lend to the government.
CrowdStrike Tumbles on Revenue Miss
Not all earnings brought cheer. Cybersecurity firm CrowdStrike fell 7.9% after reporting a revenue miss despite beating on profits. The company also offered soft guidance for the next quarter, unsettling some investors.
Global Market Optimism Grows
Abroad, markets were broadly higher. European and Asian indexes rose as investors bet that trade progress — particularly between the U.S. and China — might be on the horizon. However, President Trump’s comments on Chinese leader Xi Jinping cast doubt on that optimism.
“I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!” Trump said.
South Korea’s Political Shift Lifts Kospi
South Korea’s Kospi surged 2.7% after liberal opposition leader Lee Jae-myung was elected president. The result ends a period of political turbulence triggered by martial law under outgoing leader Yoon Suk Yeol. Lee is expected to prioritize trade negotiations and domestic economic stimulus.
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