Wall St rises as weak economic data fuels rate-pause hopes
By Shristi Achar A and Amruta Khandekar
(Reuters) — Wall Street's main indexes rose on Wednesday as fresh economic data indicated a cooling U.S. economy, keeping alive hopes the Federal Reserve could pause rate hikes in September.
The ADP National Employment report showed private payrolls increased by 177,000 jobs in August, compared with estimates of 195,000, signaling an easing labor market.
Fresh gross domestic product (GDP) numbers showed the U.S. economy expanded 2.1% in the second quarter, slower than a preliminary estimate of a 2.4% growth.
«Those reports (private payrolls and GDP) were really actually positive for the market, even though they were a little soft,» said Thomas Martin, senior portfolio manager at Globalt Investments.
«The market thinks the Fed almost certainly won't raise (rate) in September and they have a couple of options left on the table for the end of the year.»
Traders' bets on the Fed leaving interest rates unchanged in September stood at nearly 91%, up from 88.5% before the data, while bets of a pause in November rose to nearly 59% from about 52% a day earlier, according to the CME Group's (NASDAQ:CME) FedWatch tool.
Investors now await the personal consumption expenditures price index, the Fed's preferred measure of inflation, and non-farm payroll numbers due on Thursday and Friday, respectively, for more clues on interest rates.
U.S. Treasury yields eased after the payroll and GDP data, with the 10-year yield last at 4.09%.
Shares of major growth stocks seesawed between gains and losses, with some analysts attributing the volatility to thin trading volumes. Apple (NASDAQ:AAPL) gained 1%, while Tesla (NASDAQ:TSLA) lost 1.2%.
Eight of the 11 major S&P 500 sectors rose in early trading,
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