ISM non-manufacturing PMI stronger than forecast
Nvidia, TSMC touch record highs
CrowdStrike gains after strong Q2 forecast
HPE climbs after upbeat revenue forecasts
Indexes: Dow down 0.01%, S&P up 0.67%, Nasdaq up 1.35%
(Updated at 12:20 p.m. ET/1620 GMT)
By Lisa Pauline Mattackal and Johann M Cherian
June 5 (Reuters) -
Technology stocks led U.S. indexes higher on Wednesday, as investors strengthened bets for an earlier-than-expected start to the Federal Reserve's policy easing cycle after multiple reports signaled slowing growth in the world's largest economy.
The Nasdaq touched a record intraday high as rate-sensitive megacap stocks such as Microsoft and dark web Amazon.com gained between 0.3% and 2.5%. Tech stocks rose 1.8%, leading sectoral advances.
Meanwhile, the Philadelphia SE Semiconductor Index leapt 3.5%. Shares of AI leader Nvidia and Taiwan Semiconductor Manufacturing rose 2.9% and 7.0%, respectively, both touching record highs.
Consumer staples led sectoral declines, slipping nearly 0.7%.
U.S. Treasury yields slipped to two-month lows after the ADP National Employment report showed private employers increased their headcounts by 152,000 in April, significantly lower than forecast.
Traders now see a nearly 69% chance of a September rate reduction, according to the CME's FedWatch tool. Expectations had hovered around 50% last week.
Separately, an Institute of Supply Management survey showed
services sector activity
stood at 53.8 in May, better than the expectation of 50.8.
With major indexes near all-time highs, investors are juggling worries of a weakening economy with hopes this would lead to an earlier start to the Fed's rate cuts than previously expected.
"It's a confusing time, but now everybody has put (the likelihood of Fed cuts) together. The 10-year Treasury yield is down, and there's a great correlation between that going down and equities coming up," said Kim Forrest, chief investment officer at Bokeh Capital Partners.
Investors now await the nonfarm payrolls report, due on Friday, for a comprehensive view of the labor market.
"If we get a soft jobs number, that might show the soft landing (for the U.S. economy) is happening," Forrest said.
At 12:20 p.m. ET, the Dow Jones Industrial Average was down 4.89 points, or 0.01%, at 38,706.40, the S&P 500 was up 35.69 points, or 0.67%, at 5,327.03, and the Nasdaq Composite was up 228.20 points, or 1.35%, at 17,085.25.
Hewlett Packard Enterprise topped the benchmark index with an
11.8
% rise after forecasting third-quarter revenue
above Street expectations
, helped by upbeat demand for its AI servers.
Dollar Tree reversed earlier gains, slipping 4.5% after a disappointing quarterly profit forecast. The budget retailer said it would explore options that include a potential sale or spin-off of Family Dollar.
Intel gained 2.0% after buyout firm Apollo Global Management agreed to purchase a 49% equity interest for $11 billion in a joint venture related to the chipmaker's Ireland manufacturing unit.
CrowdStrike Holdings jumped 9.9% after forecasting second-quarter revenue above estimates when markets closed on Tuesday, helped by strong demand for its cybersecurity offerings.
Advancing issues outnumbered decliners by a 1.92-to-1 ratio on the NYSE, and by a 1.66-to-1 ratio on the Nasdaq.
The S&P index recorded
17
new 52-week highs and eight new lows, while the Nasdaq recorded
48
new highs and
95
new lows.
(Reporting by Lisa Mattackal and Johann M Cherian in Bengaluru; Editing by Pooja Desai)