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U.S. stocks moved slightly higher on Wednesday after falling the day before, helped by signs that the job market remains steady. Around 9:55 a.m. ET, the Dow Jones was up 165 points, or 0.4%. The S&P 500 gained 0.3%, and the NASDAQ rose 0.5%.
The recovery came after new data showed private sector hiring picked up in October. According to ADP, U.S. companies added 42,000 jobs last month, bouncing back from a decline in September. This was stronger than economists expected, easing some concerns about the health of the labor market.
This report has drawn extra attention because the official U.S. jobs report has been delayed again due to the ongoing government shutdown, now the longest in history. That delay has left investors without a key update on how the broader economy is performing.
Federal Reserve officials have added some confusion in recent days. Some hinted that another rate cut in December could be possible if inflation continues to ease, while others said interest rates should remain high if job growth stays strong.
On Tuesday, stocks had fallen sharply, especially in the tech sector, after the heads of Morgan Stanley and Goldman Sachs warned that valuations in tech stocks look overheated and risky. Investors worry that the massive rally in a few major tech companies, often called the “Magnificent Seven,” may not last forever.
Analyst Sean Peche from Ranmore Fund Management said U.S. stocks now make up about 72% of the global market index, and valuations have become very high. He warned that historically, when investors pay too much for stocks, long-term returns tend to be weaker.
Tech shares remained under pressure on Wednesday. Advanced Micro Devices (AMD) saw its stock fall despite strong sales and profit growth, as investors grew nervous about high valuations. Pinterest also dropped after giving weak revenue guidance, raising concerns about slower digital ad spending.
Out of 360 S&P 500 companies that have reported earnings so far, about 82% have beaten expectations, according to FactSet. McDonald’s shares rose after stronger U.S. sales, even though profit missed forecasts. Novo Nordisk gained after securing a Medicare pricing deal, while Humana fell sharply after cutting its earnings outlook due to higher medical costs.
In commodities, oil prices slipped further after U.S. inventory data showed a sharp rise in stored crude. Brent crude fell 0.5% to $64.15 a barrel, and West Texas Intermediate dropped 0.6% to $60.21. Inventories rose by 6.5 million barrels last week, far above expectations for a decline, raising fresh worries about weak fuel demand amid travel disruptions from the government shutdown.