Joey Solitro
Stocks wavered throughout Wednesday's session after a stronger-than-expected reading on hiring countered other employment data that suggested cooling in the labor market. Rising tensions in the Middle East and the looming nonfarm payrolls report also weighed on gains for equities.
The jobs market – and its implications for the pace of cuts to interest rates – was the main driver of the session after news dropped that private payrolls expanded at a healthy clip last month.
Private employers added 143,000 jobs in September, according to the ADP National Employment Report. "Job creation showed a widespread rebound after a five-month slowdown," ADP said in a statement. The manufacturing sector added jobs for the first time since April, the firm added, while only the information technology sector saw job losses last month.
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.
"So far, this week's labor market data has been more resilient than many analysts had expected," wrote Chris Larkin, managing director of trading and investing at E*Trade. "Like yesterday's job openings total, today's ADP employment number surprised to the upside, suggesting the labor market is bending but not breaking. But Friday's monthly jobs report will have the final word on the current jobs picture, and more than likely, on near-term market sentiment."
A slowing labor market prompted the Federal Reserve to enact a jumbo-sized rate cut last month, and market participants are trying to forecast the pace of future reductions to borrowing costs. As of October 2, futures traders assigned a 65% chance to the central bank cutting the short-term federal funds rate by a quarter of a percentage point at the next Fed meeting, according to CME Group's FedWatch Tool, up from 43% a week ago. Odds of a second half-point cut stood at 35%, down from 57% last week.
"This morning's ADP employment report adds credence to the argument that economic and labor conditions remain sturdy, especially following yesterday's upside beat on job openings," wrote José Torres, senior economist at Interactive Brokers. "Of course, tomorrow's read on unemployment claims and ISM services will provide further details, but the main event occurs on Payroll Jobs Friday."
At the closing bell, the blue chip Dow Jones Industrial Average was up less than a tenth of a percent at 42,196, while the broader S&P 500 was essentially unchanged at 5,709. The tech-heavy Nasdaq Composite added less than a tenth of a percent to 17,925.
Stocks on the move
Lamb Weston (LW) stock rose 2.6% after the potato producer beat top- and bottom-line expectations for its fiscal first quarter, announced a restructuring plan and lowered its full-year profit forecast.
"Restaurant traffic and frozen potato demand, relative to supply, continue to be soft, and we believe it will remain soft through the remainder of fiscal 2025," Lamb Weston CEO Tom Werner said in a statement.
As a result of the restructuring plan, Lamb Weston now anticipates earnings per share in the range of $4.15 to $4.35, which is down from its previous forecast of $4.35 to $4.85. However, it continues to expect that revenue will range between $6.6 billion to $6.8 billion.
Humana (HUM) stock plunged 11.8% after the health benefits company announced preliminary 2025 Medicare Advantage Star Ratings data for its plans, which included a significant reduction in members enrolled in plans with ratings of four stars and above.
Humana said in a regulatory filing Wednesday that approximately 1.6 million, or 25%, of its members are currently enrolled in MA plans that are rated as four stars and above for 2025, which is down from 94% in 2024.
"The decline in Stars performance for 2025 will impact Humana's quality bonus payments in 2026," Humana said in the filing. "The 2025 Star rating details are expected to be formally released by CMS on or around October 10th."
Nike calls a time out
Nike (NKE) was the worst performer among all 30 Dow Jones stocks today, falling 6.8% after the athletic apparel and footwear retailer reported mixed results for its fiscal first quarter.
Making matters worse, the blue chip withdrew its full-year guidance and postponed its investor day.
The company disclosed last month that Elliott Hill would become president and chief executive of Nike as of October 14, replacing current CEO John Donahoe. Hill spent 32 years at Nike in various roles before retiring in 2020 as president of its consumer and marketplace division.
"Given our CEO transition and with three quarters left in the fiscal year, we are withdrawing our full-year guidance," Chief Financial Officer Matthew Friend said in a statement. "This provides Elliott with the flexibility to reconnect with our employees and teams, evaluate the current strategies and business trends, and develop our plans to best position the business for fiscal 2026 and beyond."
Wednesday's drawdown erased roughly $9 billion in market cap and Nike stock is now off 23% for the year to date. That lags the broader market by more than 40 percentage points. As disappointing as 2024 has been, Wall Street sees brighter days ahead. The company's brand leadership and the stock's depressed valuation are just two factors contributing to analysts being largely bullish on Nike.
Related content
- If You'd Put $1,000 Into Adobe Stock 20 Years Ago, Here's What You'd Have Today
- Which Stocks Are Senators and Congresspeople Selling?
- Is Investing In Gold Worth It? How Gold Prices Have Changed
-
I missed the 2-Year IRMAA Rule. Now, my Medicare costs are skyrocketing. What are my options?A spike in income could result in costly IRMAA charges on your Medicare premiums. We ask financial planning experts for advice.
-
How to Build Your Financial Legacy Three Piggy Banks at a TimeA wealth adviser shares a childhood saving technique that taught him lessons of stewardship, generosity and responsibility and helped him answer the question we all need to answer to define our lives by impact rather than greed: 'What is this all for?'
-
How to Build Your Financial Legacy Three Piggy Banks at a Time
A wealth adviser shares a childhood saving technique that taught him lessons of stewardship, generosity and responsibility and helped him answer the question we all need to answer to define our lives by impact rather than greed: 'What is this all for?'
-
Which of These Four Withdrawal Strategies Is Right for You?Your retirement savings may need to last 30 years or more, so don't pick a withdrawal strategy without considering all the options. Here are four to explore.
-
July CPI Report Ignites a Risk-On Rally: Stock Market TodayMarket participants price out worst-case scenarios for tariffs and inflation and will now turn their attention to employment and growth.
-
July CPI Report Boosts Rate-Cut Odds: What the Experts SayThe July CPI report shows that tariffs are having a slight impact on inflation, though not enough to keep the Fed from cutting interest rates.
-
DST Exit Strategies: An Expert Guide to What Happens When the Trust SellsUnderstanding the endgame: How Delaware statutory trust dispositions work, what investors can expect and why the exit is probably more important than the entrance.
-
Think Selling Your Home 'As Is' Means You'll Have No Worries? Think AgainThere are significant risks and legal obligations involved in selling a home 'as is' and by yourself, without a real estate agent.
-
Stocks Slip Ahead of July CPI Report: Stock Market TodayThe latest inflation updates roll in this week and Wall Street is watching to see how much of an impact tariffs are having on cost pressures.
-
What the OBBB Means for Social Security Taxes and Your Retirement: A Wealth Adviser's GuideFor Americans in lower- and middle-income tax brackets, the enhanced deduction for older people reduces taxable income, shielding most of their Social Security benefits from being taxed.
