S&P 500, Nasdaq at All-Time Highs Ahead of U.S. Jobs Report
S&P 500, Nasdaq at All-Time Highs Ahead of U.S. Jobs Report
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The S&P 500 was up 0.57%, the Dow Jones Industrial Average increased 0.56%, and the Nasdaq rose 0.55%. The S&P 500 hit an all-time high of 2,426 on Thursday, while the Nasdaq set an intraday record of 6,233.
The U.S. economy added 253,000 private payroll jobs in May, according to the ADP National Employment Report. Analysts anticipated 181,000 jobs to have been added, slowing slightly from the 177,000 pace of job growth in April.
This is just one signal, but it's pretty bad news for the bears," said Mike Loewengart, vice president of investment strategy at E*Trade. "It certainly contributes to the perception that the economy is sure-footed, and will only strengthen the [Federal Reserve's] conviction to raise rates in June. More so when you consider the strong second-quarter corporate earnings growth expected by many street analysts."
The ADP report gives investors a hint of what to expect ahead of Friday's official U.S. jobs report. The nonfarm payrolls report for May is expected to demonstrate continued strength in the labor market with 175,000 jobs expected to have been added in May. The unemployment rate is forecast to hold at 4.4%, according to FactSet estimates. Hourly earnings are anticipated to have risen 0.2% in May.
Friday's jobs report could color investors' expectations for the pace of rate hikes for the rest of the year. The Federal Open Market Committee, the decision-making arm of the Fed, is next set to meet June 13-14. Markets already have high expectations for an interest-rate increase at the next meeting of the FOMC, the second of three expected hikes this year. Wall Street has priced in a nearly 89%.
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