The Dow Jones Industrial Average rose 96.04 points, or 0.25 percent, to 38,807.33. The S&P 500 added 62.69 points, or 1.18 percent, to 5,354.03. The Nasdaq Composite Index increased by 330.86 points, or 1.96 percent, to 17,187.9. Both the S&P 500 and Nasdaq indexes closed at record highs.
Seven of the 11 primary S&P 500 sectors ended in green, with technology and communication services leading the gainers by going up 2.68 percent and 1.51 percent, respectively. Meanwhile, utilities and consumer staples led the laggards by dropping 0.58 percent and 0.22 percent, respectively.
The Institute for Supply Management reported on Wednesday that its service-sector purchasing managers' index (PMI) rebounded to 53.8 percent in May from 49.4 percent in April. This exceeded economists' expectations of a rise to 50.7 percent, according to a Wall Street Journal poll. Numbers above 50 percent indicate expansion in the economy. The ISM index dipped into contraction territory in April for the first time since December 2022. Anthony Nieves, chair of the ISM services survey committee, stated that the second half of the year is expected to be slightly better than the first half.
Meanwhile, private employers added 152,000 jobs in the United States last month, less than the 175,000 economists had expected, according to data from payroll provider ADP, which suggests the U.S. labor market is continuing to cool down, boosting investor hopes that the Fed could cut interest rates later this year. U.S. Treasury yields extended their recent declines after the report. The yield on the benchmark 10-year Treasury note was 4.283 percent, and 30-year Treasury note was 4.433 as of 4:15 p.m. EDT.
"We're seeing the economic data starting to ease up a little bit and the repercussions for that is that you're seeing the pressure on rates come off the boil a little bit mixed in with the potential for weaker economic data, which is a pretty good recipe for the bond market," said Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions in Boston.
Shares of Nvidia rose more than 5 percent on Wednesday, bringing the AI chip maker's market capitalization to more than 3 trillion U.S. dollars, overtaking Apple to become the world's second most valuable company. Nvidia crossed the 1 trillion dollars mark last summer and moved above 2 trillion dollars in February. The company plans to split its stock 10-for-1, effective June 7.
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