The ADP National Employment Report revealed on Wednesday that US businesses added just 152k jobs in May, much fewer than the predicted 175k figure. While not a typically bullish sign, the data point indicates a cooling labour market, which is exactly what the Fed has been looking for to justify lowering rates. US indices certainly took the news well, the S&P 500 and Nasdaq Composite gaining 1.2% and 2% respectively, both hitting new all-time highs. The Dow Jones, still climbing back out of its recent pullback, was up a quarter of a percent.
As usual, tech stocks contributed the bulk of the firepower, with Nvidia (NVDA) once again making up the vanguard of the move. The chipmaker’s stock gained over 5% on Wednesday, taking its market cap over the $3 trillion mark, giving it a larger valuation than Apple (AAPL). Worth mentioning that Nvidia will execute a 10-for-1 stock split after Friday’s market close. Microsoft (MSFT), still the largest company by market cap, gained a solid 1.9%.
The employment data is an appetiser before the main course later today: Non-Farm Payrolls. The consensus currently stands at 185k new jobs in May, if the actual number falls as short as the ADP figures did earlier in the week, then many traders will view that as confirmation of a change in trajectory in the US labour market.
As predicted, the ECB lowered its Deposit Facility Rate 25 basis points to 3.75% yesterday. The move was so widely priced in that EURUSD barely even reacted to the announcement. Nevertheless, a major central bank lowering its target interest rate will no doubt weigh on other banks to do the same.
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