US and European stock markets climbed Wednesday on the eve of an expected European Central Bank interest rate cut, and as US jobs data fueled hopes that the Federal Reserve will soon follow suit.
New York’s broad-based S&P 500 and tech-heavy Nasdaq both hit fresh highs, while chip designer Nvidia topped $3 trillion in market capitalization.
This makes Nvidia only the third US company to reach a market value of that level, after Apple and Microsoft. Its shares closed 5.2 percent up.
“You have kind of the best of both worlds for the stock market in that you have lower interest rates and strength in the mega cap stocks, specifically, Nvidia,” said Patrick O’Hare of Briefing.com.
US economic data also showed that private sector hiring cooled more than expected in May, with employers adding 152,000 jobs, according to payroll firm ADP.
Investors have been concerned that the US central bank will keep interest rates higher for longer, but a softer labor market could give the Federal Reserve confidence to pivot to cuts more quickly.
“If you have fewer people working, that could imply an increase in the unemployment rate,” Sam Stovall, chief investment strategist at financial research firm CFRA, told AFP.
“That would bring down inflation and increase the likelihood that the Fed will be able to start cutting rates later this year,” he added. “So, bad is…
