Stocks jumped higher out of the gate Wednesday thanks to the latest jobs data. By mid-afternoon, however, the main indexes had erased these earlier gains as oil prices crumbled.
Ahead of the open, ADP said the U.S. added 103,000 private payrolls in November, below economists' estimates for a gain of 128,000. The data also showed that annual wage growth slowed to its lowest level since 2021 for both job-stayers (+5.6%) and job-changers (+8.3%). The ADP jobs data is the latest sign that the hot labor market is starting to cool, and comes ahead of the Labor Department's monthly nonfarm payroll report, which will be released this Friday.
"The softer turn of recent labor market releases reduces the risk that inflation pressures revive due to wage-price issues, making it easier for the Fed to pivot to rate cuts in 2024," says Bill Adams, chief economist for Comerica Bank.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The data sent the three main indexes higher to start the day. At the close, however, the Nasdaq Composite (-0.6% at 14,146), the S&P 500 (-0.4% at 4,549) and the Dow Jones Industrial Average (-0.2% at 36,054) were all in negative territory as focus shifted to sinking oil prices.
Energy stocks fall alongside oil prices
Indeed, U.S. crude futures crumbled 4.1% to $69.38 per barrel after data from the Energy Information Administration (EIA) showed gasoline inventories rose by more than 5 million barrels last week. Oil prices have been sliding in recent months and are down about 25% from their September highs near the $94 per-barrel mark.
Not surprisingly, energy stocks suffered today, with Diamondback Energy (FANG, -2.4%), Marathon Oil (MRO, -3.5%) and SLB (SLB, -2.9%) among the biggest decliners.
Mastercard announces major dividend hike
Elsewhere, Mastercard (MA) gained 0.4% after the credit card giant said its board of directors approved a 16% dividend hike. The company also disclosed a new $11 billion stock buyback program.
Mastercard is a solid choice among dividend stocks, having consistently paid shareholders since it went public in 2006. This is nearly as long as MA has been a member of the Berkshire Hathaway equity portfolio, with Warren Buffett & Co. initiating a stake in Q1 2011. The 4 million MA shares currently owned by Berkshire account for a minuscule 0.5% of the portfolio.
Bitcoin keeps rising
Bitcoin was another notable gainer Wednesday, rising 0.4% to $43,868 (Bitcoin markets don't close; price taken at 4 pm Eastern). The cryptocurrency has surged roughly 50% since late October on hopes the first spot bitcoin ETF (exchange-traded fund) could soon be approved. Current Bitcoin ETFs are tied to futures prices, which are where the cryptocurrency is expected to be trading in the future.
"The rally has been quite extraordinary even by Bitcoin's standards and highlights how excited the community is by the prospect of an ETF approval," says Craig Erlam, senior market analyst at OANDA. "Lower interest-rate expectations have almost certainly helped, but I think the ETF is still probably the primary driver."
Today's upside came even as JPMorgan Chase (JPM, -1.1%) CEO Jamie Dimon said during congressional testimony that he is "deeply opposed" to crypto. "If I was the government, I'd close it down," he added while speaking in front of the Senate Banking Committee.
Looking ahead to Thursday, weekly jobless claims will be released. Additionally, Broadcom (AVGO, -1.0%) and Lululemon Athletica (LULU, +0.8%) make an appearance on the earnings calendar.
Related content
-
With Fixed Indexed Annuities, Zero Is Your HeroFixed indexed annuities are retirement tools that can offer potential growth as well as principal protection by limiting market risk. Here's how they work.
-
Before Buying Your First Home, Get These Three Ducks in a RowWith mortgage rates higher than we're used to, making sure you can comfortably afford to buy your first home is more important than ever.
-
Stock Market Today: Stocks Swing Lower After Fed's Jumbo Rate CutThe Federal Reserve caught plenty of folks off-guard with its jumbo-sized half-percentage point rate cut.
-
Fed Goes Big With First Rate Cut: What the Experts Are SayingFederal Reserve A slowing labor market prompted the Fed to start with a jumbo-sized reduction to borrowing costs.
-
Stock Market Today: Stocks Waver Near All-Time Highs Ahead of Fed Rate CutEquities were torn between discounting a quarter-point cut and a half-point cut to interest rates tomorrow.
-
Stock Market Today: Dow Hits Record High Ahead of Fed MeetingAll eyes are on this Wednesday's Fed announcement, with expectations for a jumbo-sized rate cut rising.
-
Stock Market Today: Stocks Rise as Fed Rate Cuts NearThe main indexes closed out the day and week notably higher as excitement swirls ahead of next week's rate cut.
-
Stock Market Today: Stocks Rise in Choppy Day for MarketsModerna was the worst S&P 500 stock today after the vaccine maker slashed its R&D budget.
-
Stock Market Today: Stocks Stagger After CPI but Rebound to Post Gains
A mixed CPI report had traders recalibrating their rate-cut bets.
-
Stock Market Today: Stocks End Mixed Ahead of August CPI ReportSharp losses for blue chip banks JPMorgan and Goldman Sachs pressured the Dow Jones Industrial Average.
