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Stock Market Today: Dow clinches 4th day of gains as softer data ease Fed fears

Published 08/30/2023, 04:10 PM
© Reuters.
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Investing.com -- The Dow closed higher Wednesday, posting its fourth-straight day of gains as signs of a slowing U.S. economy bolstered bets on a Federal Reserve pause next month.

The Dow Jones Industrial Average gained 0.1%, 28 points, Nasdaq was up 0.5%, and the S&P 500 rose 0.4%. 

Labor market weakness, slower Q2 U.S. growth buoy Fed pause bets

The labor market, continued to show signs of slowing after data showed the economy produced fewer than expected jobs in August.

ADP reported about 177,000 new private-sector jobs were created in August, well below 371,000 increase in July, easing fears that a tight labor market would push wages and inflation higher.

"After two years of exceptional gains tied to the recovery, we're moving toward more sustainable growth in pay and employment as the economic effects of the pandemic recede,” Nela Richardson, chief economist at ADP said Wednesday.

As well signs of a weakening labor market, the latest reading of second-quarter economic growth was revised lower to 2.1% from a prior reading of 2.4%.

At nearly 90%, bets on the Fed’s next move in September continue to lean heavily toward a pause, according to Investing.com’s Fed Rate Monitor Tool.

Apple leads tech higher amid iPhone 15 optimism

Apple Inc (NASDAQ:AAPL) led tech higher rising nearly 2% after Citigroup reiterated its buy rating on the stock amid optimism about the iPhone 15 launch slated for Sept. 12.

Apple is expected to hike prices for the iPhone 15 by $100 to $200, Citi estimates, adding that the new iPhone is likely to spur a wave of updates among consumers with an iPhone 12.

Nvidia rises again to lift chips, but Ambarella slumps 

Chips stocks also helped the broader tech sector advance, with bellweahter Nvidia (NASDAQ:NVDA) climbing 1%, but semiconductor maker Ambarella Inc (NASDAQ:AMBA) plunged 20% after its weaker Q3 guidance offset better-than-expected Q2 results.

TD Cowen downgraded Ambarella to market perform from outperform amid worries about shorterthat the company’s investments in AI-related large learning models, or LLM, are unlikely to generate meaningful revenue until at least 2025.

HP, Box falter on earnings stage

HP Inc (NYSE:HPQ) fell nearly 7% after cutting its annual profit and free cash flow guidance and reporting second-quarter sales that fell short of estimates amid a slower than expected recovery in PC demand in China.

There was “unexpected weakness” in China, UBS said in a note, that impacted demand, which has not recovered similar to other markets in APAC region.

Box Inc (NYSE:BOX), down 12%, was also punished for annual revenue guidance that fell short of estimates and second-quarter that missed analyst estimates.

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