Stocks recouped some previous losses Wednesday as U.S. Treasury yields ticked lower from 2007-level highs. The Dow Jones Industrial Average rose more than 125 points, while the S&P 500 Index and Nasdaq Composite added 0.8% and 1.4%, respectively.
Here's how the market settled on Wednesday:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
Driving market moves, U.S. private payrolls grew by just 89,000 in September, according to ADP's report Wednesday, with growth dropping sharply from August's upwardly revised print of 180,000 and coming in below the 160,000 expected by economists consensus. The ADP also said annual wage growth declined for a 12th straight month to a rate of 5.9%.
The report comes a day after the Labor Department's Job Openings and Labor Turnover Survey (JOLTS) showed job openings unexpectedly rose in August, adding more fuel to concerns that the Federal Reserve will need to maintain a higher-for-longer interest rate environment to help loosen the tight labor market. ADP's report comes ahead of the Labor Department's monthly jobs print due out Friday, which economists expect to show non-farm payrolls to increase by 170,000 in September.
Wednesday's softer-than-expected jobs report helped U.S. Treasury yields tick slightly lower from their 16 year levels, with the 10-year yield trading at about 4.72%. The 30-year Treasury yield as traded lower at 4.85% on Wednesday.
Market participants are currently pricing in a 18% chance that the Federal Reserve will raise rates again to a range of 5.50% to 5.75% at the conclusion of its November meeting, according to CME Group's FedWatch Tool.
Also making headlines, Republican Rep. Kevin McCarthy was ousted from his position as House Speaker late Tuesday, marking the first time in history that the House of Representatives removed its leader in a no-confidence vote. While the news may have little impact for Wall Street on the day, the decision likely increasing the chance for a government shutdown this quarter as the House works to appoint a new leader in the near-term.
In other economic news, total mortgage demand fell 6% week-to-week as 30-year fixed mortgage rates increased to 7.53%, according to the Mortgage Bankers Association's seasonally adjusted index reading Wednesday.
"Mortgage rates continued to move higher last week as markets digested the recent upswing in Treasury yields," said Joel Kan, vice president and deputy chief economist at MBA, in a statement. "As a result, mortgage applications ground to a halt, dropping to the lowest level since 1996."
The Institute for Supply Management's (ISM) non-manufacturing index reading for September came in slightly below estimates at 53.6. The gauge also was below August's reading of 54.4, but still signaled expansion in the sector as the reading was above the neutral level of 50.
"There has been a slight pullback in the rate of growth for the services sector, which is attributed to slower rates of growth in the New Orders and Employment indexes. The majority of respondents remain positive about business conditions; moreover, some respondents indicated concern about potential headwinds," said Anthony Nieves, Chair of the ISM Services Business Survey Committee, in a statement.
Elsewhere on Wednesday, Google
Intel
"Our intention to establish PSG as a standalone business and pursue an IPO is another example of how we are consistently unlocking more value for our stakeholders," CEO Patrick Gelsinger said in a statement.
For Thursday, market participants will react to more labor market data ahead of Friday's "official" jobs report.
