U.S. Stocks Seeing Further Upside After Early Advance

After moving mostly higher early in the session, stocks have seen further upside over the course of the trading day on Wednesday. The tech-heavy Nasdaq has led the charge, reaching a new record intraday high.

Currently, the major averages are all in positive territory, with the Dow joining the Nasdaq and S&P 500 in positive territory after seeing some early weakness.

While the Dow is up just 52.30 points or 0.1 percent at 38,763.59, the S&P 500 is up 48.47 points or 0.9 percent at 5,339.81 and the Nasdaq is up 281.62 points or 1.7 percent at 17,138.67.

The surge by the Nasdaq comes as tech stocks continue to take their cues from Nvidia (NVDA), as the AI darling soars by 4.3 percent to a new record intraday high.

Last month, Nvidia announced a ten-for-one stock split, with holders of the company’s common stock as of the close of trading on Thursday set receive nine additional shares.

The advance by Nvidia is contributing to strength in the broader semiconductor sector, resulting in a 3.9 percent spike by the Philadelphia Semiconductor Index.

Semiconductor equipment manufacturers Applied Materials (AMAT) and KLA Corp. (KLAC) are also posting standout gains after Barclays upgraded its rating on the stocks to Equal-Weight from Underweight.

Computer hardware stocks are also seeing substantial strength on the day, driving the NYSE Arca Computer Hardware Index up by 3.5 percent.

Shares of Hewlett Packard Enterprise (HPE) are skyrocketing by 12.8 percent after the technology company reported fiscal second quarter results that exceeded analyst estimates on both the top and bottom lines.

Biotechnology, software and networking stocks are also seeing notable strength, while gold stocks are turning in some of the best performances outside the tech sector amid an increase by the price of the precious metal.

The strength on Wall Street also comes following the release of a report from payroll processor ADP showing private sector job growth in the U.S. slowed by more than expected in the month of May.

ADP said private sector employment climbed by 152,000 jobs in May after jumping by a downwardly revised 188,000 jobs in April.

Economists had expected private sector employment to increase by 173,000 jobs compared to the addition of 192,000 jobs originally reported for the previous month.

While the bigger than expected slowdown in job growth suggests some economic weakness, the data has added to optimism about the outlook for interest rates.

Treasury yields have moved lower following the release of the jobs data, with the ten-year yield falling to its lowest levels in two months.

Meanwhile, traders have largely shrugged off a separate report from the Institute for Supply Management showing service sector activity returned to growth in the month of May after contracting in April for the first time since December 2022

The ISM said its services PMI jumped to 53.8 in May from 49.4 in April, with a reading above 50 indicating growth in the sector. Economists had expected the index to inch up to 50.8.

With the much bigger than expected increase, the services PMI reached its highest level since hitting 54.1 in August 2023.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index slumped by 0.9 percent and China’s Shanghai Composite Index slid by 0.8 percent, while South Korea’s Kospi jumped by 1.0 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the U.K.’s FTSE 100 Index edged up by 0.2 percent, the French CAC 40 Index and the German DAX Index both advanced by 0.9 percent.

In the bond market, treasuries have moved higher over the course of the session after seeing early volatility. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.9 basis points at 4.297 percent.