NEW YORK: The S&P 500 and the Nasdaq advanced on Wednesday as Alphabet hit an intraday record high thanks to a favorable antitrust ruling, while softer-than-expected July job openings data drove up bets of an interest-rate cut in September.
Alphabet jumped 8.1 percent after a Washington judge ruled late on Tuesday Google will not have to sell its Chrome browser, but will have to share data with rivals. Apple gained 2.6 percent as the ruling also allowed Google to keep making lucrative payments to the iPhone maker. The communication services index jumped 3.1percent to a record high, and tech stocks gained 0.6percent. Energy stocks fell 1.6 percent, tracking lower oil prices.
Strengthening bets of an imminent interest-rate cut, a Labor Department report showed US job openings fell more than expected in July and hiring was moderate, consistent with easing labor market conditions. “It is the latest data point that reiterates a soft jobs market and helps tip the Fed’s scale toward a rate cut, which we’re now likely to see later this month,” said Bret Kenwell, US investment analyst at eToro.
Traders are now pricing in a 95.6 percent chance of a September rate cut, per CME Group’s FedWatch tool, compared with nearly 92percent before the data.
The spotlight is now on Friday’s highly anticipated nonfarm payrolls numbers, especially after Federal Reserve Chair Jerome Powell’s comments at Jackson Hole last month signaled labor market weakness could be the deciding factor for its rate decision on September 17.
“If those (NFP) numbers come out really strong, meaning really tight labor conditions and everything’s fine, the market’s going to get a little bit worried,” said Jason Barsema, president of Halo Investing. The market is looking for something to convince the Fed to cut, he said.
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