- US stocks fluctuated on Wednesday after disappointing labor-market data drove Treasury yields higher and sparked valuation concerns.
- The US added 117,000 private payrolls in February, ADP said. That came in well below the 200,000 increase expected.
- The report and sudden jump in yields offset optimism around the US having COVID-19 vaccines for all Americans by May.
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US equities traded mixed on Wednesday as stimulus optimism was offset by rising Treasury yields.
Early strength across stock sectors faded after ADP’s monthly employment report showed February job growth handily missing expectations. The US added 117,000 private payrolls last month, according to the report. Economists surveyed by Bloomberg anticipated a 200,000-payroll gain.
The reading signals the labor market is returning to growth after a nearly stagnant winter, but the weaker-than-expected data highlights just how difficult it will be for the economy to recoup millions of lost jobs.
Treasury yields swung higher soon after the report’s release. The move revived concerns of overstretched stock valuations and saw the tech-heavy Nasdaq composite underperform peers.
Here’s where US indexes stood shortly after the 9:30 a.m. ET open on Wednesday:
- S&P 500: 3,865.90, down 0.11%
- Dow Jones industrial average: 31,367.87, down 0.08% (23.65 points)
- Nasdaq composite: 13,355.88, down 0.02%
The modest decline follows similar weakness in Tuesday’s session. Valuation concerns led tech stocks to weigh on major indices. The Nasdaq composite sank the most, tumbling 1.7% into the close.
ADP’s labor-market data overshadowed new optimism around the nation’s fight against the coronavirus. President Joe Biden announced Tuesday afternoon that the US will have enough vaccine doses for every American by the end of May, pulling forward the key forecast by two months.
The news comes as the rate of vaccination nears 2 million doses per day on average, well above the 1.3 million pace seen in the final week of February, according to Bloomberg data.
Democrats, meanwhile, continue to push the president’s $1.9 trillion stimulus proposal to a Senate vote. The House passed the measure on Saturday, and Senate Majority Leader Chuck Schumer has said he aims to bring the bill to the Senate floor by mid-week. Biden ultimately aims to sign the package into law before expanded unemployment benefits lapse in mid-March.
The package is far from a done deal. Democrats are still haggling over some elements of the bill, including the size of a new supplement to unemployment insurance. The party needs all 50 votes to pass the bill through budget reconciliation, making any last-minute changes risky to the vote’s success.
Lyft rose after the company announced it enjoyed the best week for ridership since the start of the pandemic. Wedbush analysts on Tuesday named Lyft and Uber as top recovery plays, since reopening is expected to revive ride activity.
Bitcoin soared above $51,000 after trading as low as $47,118 on Tuesday. The run-up places the popular cryptocurrency at its highest levels since late February, when it tumbled from record highs.
Spot gold sank 1.7%, to $1,708.43, at intraday lows. The US dollar strengthened against Group-of-20 currencies and Treasury yields rose.
Oil prices shot higher amid the Treasury sell-off. West Texas Intermediate crude gained as much as 2.3%, to $61.10 per barrel. Brent crude, oil’s international benchmark, jumped 2.4%, to $64.18 per barrel, at intraday highs.