US equities shook off early losses on Wednesday as markets digested fresh data on the US labor market and services sector, while Microsoft denied a report suggesting slower AI sales growth.
The Dow Jones Industrial Average rose 0.9%, the S&P 500 added 0.4%, and the Nasdaq Composite climbed 0.2%, extending gains after Tuesday’s broadly positive session.
The ADP private-sector employment report showed US companies shed 32,000 jobs in November, driven primarily by small businesses, compared with expectations for a modest gain. The numbers added fuel to bets that the Federal Reserve will cut interest rates next week, with nearly 90% of futures markets pricing in a quarter-point reduction.
Meanwhile, the Institute for Supply Management reported that US services activity expanded slightly in November to 52.6%, while its prices-paid index eased to a seven-month low, a potentially positive signal for inflation. Markets are now focused on Friday’s PCE inflation release for a broader read on consumer prices.
Shares of Microsoft fell more than 1% after a report claimed several divisions lowered AI sales targets for the fiscal year ending in June. The Information cited internal sources, but Microsoft pushed back, denying that overall AI sales projections had been reduced. The report weighed on other tech names, with Nvidia, Broadcom, and TSMC all retreating.
Bitcoin rebounded from recent lows, rising above $93,000 before retracing some gains, extending its recovery from a weeks-long slump that had pulled the token below $83,000.
Across the Atlantic, London equities lagged behind their US peers. The FTSE 100 closed flat at 9,692, with banking stocks performing broadly in line after Chancellor Rachel Reeves’ budget yesterday avoided fresh measures for the sector. The FTSE 250 rose to 22,001, while the AIM All-Share added 0.2% to 749.17.
Investors remain cautious as markets balance optimism over potential Fed easing against persistent concerns over inflation, AI valuations, and uneven global growth.
