Wall Street ticks higher as tech boost offsets economic worries
U.S. stocks edged higher on Wednesday, as strength in technology shares offset declines driven by weak economic data that deepened concerns about the impact of the Trump administration's erratic trade policies.
The U.S. services sector contracted for the first time in nearly a year in May, while businesses paid higher input prices, a reminder that the economy was still at risk of experiencing a period of very slow growth and high inflation.
The ADP National Employment Report showed U.S. private employers added the fewest number of workers in more than two years in May. Investors are awaiting Friday's nonfarm-payrolls data for more signs on how trade uncertainty is affecting the U.S. labor market.
'I think you get very short term volatility from the ADP number, but I don't think that it means that much until we see the payrolls number,' said Larry Tentarelli, chief technical strategist at Blue Chip Daily Trend Report.
Washington doubled tariffs on imported steel and aluminum to 50% on Wednesday, the same day by which President Donald Trump wanted trading partners to make their best offers to avoid other punishing import levies from taking effect in early July.
Investor focus is squarely on tariff negotiations between Washington and its trading partners, with Trump and Chinese leader Xi Jinping expected to speak sometime this week as tensions simmer between the world's two biggest economies.
Wall Street mixed after Trump's steel tariff threat
May was the best month for the S&P 500 index and the tech-heavy Nasdaq since November 2023, thanks to a softening of Trump's harsh trade stance and upbeat earnings reports.
The S&P 500 remains less than 3% away from its record highs touched in February.
Barclays joined a slew of other brokerages in raising its year-end price target for the S&P 500, pointing to easing trade uncertainty and expectations of normalized earnings growth in 2026.
At 10:36 a.m. ET, the Dow Jones Industrial Average rose 88.09 points, or 0.20%, to 42,605.07, the S&P 500 gained 17.36 points, or 0.29%, to 5,987.73 and the Nasdaq Composite gained 58.41 points, or 0.31%, to 19,459.09.
Eight of the 11 major S&P 500 sub-sectors rose, led by communication services with a 1.2% rise, while information technology stocks gained 0.4%.
Shares of Hewlett Packard Enterprise rose 1.1% as demand for the company's artificial-intelligence servers and hybrid cloud segment helped it beat estimates for second-quarter revenue and profit.
GlobalFoundries rose 2.2% after the chip manufacturer announced plans to increase its investments to $16 billion.
Tesla dropped 3.8%. The electric-vehicle maker's sales dropped for the fifth straight month in big European markets.
Wells Fargo shares rose 1.2% after the U.S. Federal Reserve removed a $1.95 trillion asset cap imposed in 2018 following years of missteps.
Shares of cybersecurity firm CrowdStrike slumped 4.7% after it forecast quarterly revenue below estimates.
Dollar Tree fell 10.2% after the discount store operator forecast second-quarter adjusted profit would be as much as 50% lower than a year ago due to tariff-driven volatility.
Advancing issues outnumbered decliners by a 2.02-to-1 ratio on the NYSE and by a 1.41-to-1 ratio on the Nasdaq.
The S&P 500 posted 19 new 52-week highs and no new lows while the Nasdaq Composite recorded 63 new highs and 23 new lows.
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