The Wall Street and Broad Street signs outside the New York Stock Exchange (NYSE) in New York, US, on Monday, Dec. 4, 2023.
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What you need to know today
Rally falters
The Dow Jones Industrial Average and the S&P 500 closed lower for a third straight day Wednesday — a first for both indexes since October. The Dow fell 0.19%, while the S&P 500 shed 0.39%. The Nasdaq Composite dropped 0.58%. Investors assessed data indicating falling inflation and awaited the monthly jobs report. Asia markets also fell, with Japan’s Nikkei 225 leading losses, down 1.72%.
Jobs slowdown
Payrolls processing firm ADP said Wednesday that private sector job creation slowed further in November and wages showed their smallest growth in more than two years. Companies added 103,000 workers for the month, slightly below the downwardly revised 106,000 in October and missing the 128,000 Dow Jones estimate.
Crypto demons
Jamie Dimon, CEO of JPMorgan Chase, lashed out at bitcoin and its peers, suggesting cryptocurrencies should be banned in remarks on Wednesday on Capitol Hill. “I’ve always been deeply opposed to crypto, bitcoin, etc.,” he said. “The only true use case for it is criminals, drug traffickers … money laundering, tax avoidance.” “If I was the government, I’d close it down,” he added. The price of bitcoin recently topped $44,000.
Oil slips
The West Texas Intermediate contract for January fell $2.94, or 4.07%, to settle at $69.38 a barrel Wednesday, closing at the lowest level since late June. Retail gasoline prices hit their lowest since January ahead of the holiday shopping and travel season. The Brent contract for February declined $2.90, or 3.76%, to settle at $74.30 a barrel.
[PRO] Forget the ‘obvious’ AI stocks
Artificial intelligence has been a huge theme this year, with investors rushing into many AI-related stocks. Nvidia soared over 200% year to date, and Microsoft around 56%. But not all AI-related stocks are necessarily too expensive to buy right now.
The bottom line
Wall Street’s main indexes are starting to show signs of not being able to sustain a fiery rally that led to a five-week winning streak.
The blue-chip Dow and the benchmark S&P 500 have now fallen for three straight days. Caution is in the air.
A string of labor data through the week has set the tone for markets ahead of the Federal Reserve’s last policy meeting of the year next week.
The numbers so far have shown that the U.S. central bank’s aggressive policy stance has taken hold.
November private payroll data from ADP offered the latest indication that the job market, long considered a pain point for the Fed, was easing.
“ADP’s payroll data shows the Fed’s anti-inflation treatment is now really taking effect,” said David Russell, global head of market strategy at online investing platform TradeStation.
“The numbers point toward a soft landing, but investors may start to worry about a recession if policy remains too hawkish. It’s the Fed’s battle to lose at this point.”
Data on Tuesday which showed job openings in October fell to the lowest level since March 2021.
But as the week edges closer to an end, the focus will mainly shift to the Labor Department’s keenly watched November employment report on Friday.
— Jeff Cox contributed to this story.
