US stocks rise as disappointing ADP payrolls point to future rate cuts

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US stocks rise as disappointing ADP payrolls point to future rate cuts © Reuters

Investing.com — U.S. stocks rose Wednesday, as more disappointing employment data added to confidence that the Federal Reserve will start cutting interest rates next year.

By 09:35 ET (14:35 GMT), the rose 78 points, or 0.2%, the traded 14 points, or 0.3%, higher and the climbed 40 points, or 0.3%.

ADP private payrolls growth slows

Investors fully expect the to hold rates unchanged when the policy makers get together later this month, but confidence is also growing that interest rates could be cut as soon as the first quarter of next year.

Data released Wednesday added to this belief, as data from payroll processor ADP indicated that private U.S. employers added just 103,000 jobs last month, down from a revised mark of 106,000 in October. Economists had forecast an increase of 130,000 jobs.

This followed Tuesday’s release showing U.S. dipped to their lowest mark in over two years in October, suggesting a cooling in labor demand.

Friday sees the release of the official which is likely to shape expectations for the interest rate path ahead.

Campbell Soup beats expectations

In corporate news, Campbell Soup (NYSE:) stock rose over 4% after the food company surpassed expectations for quarterly profit on Wednesday, benefiting from higher prices for its packaged meals and snacks that helped offset a slowdown in demand from cost-conscious consumers.

Brown Forman (NYSE:) stock slumped over 6% after the whiskey-maker cut net sales forecast for 2024 as cost-conscious consumers looked at cheaper alternatives to its more pricier brands in the United States.

Cloud services provider Box (NYSE:) stock fell 10% after reporting disappointing third-quarter results after the close Tuesday.

ExxonMobil (NYSE:) edged higher after the oil major announced plans to increase the pace of its share buybacks after it closes its $60 billion takeover of shale producer Pioneer Natural Resources (NYSE:).

Oil prices continue to fall

Oil prices fell Wednesday, trading at five-month lows as traders fretted over disappointing OPEC+ output cuts, China’s economic woes and an unexpected build in stockpiles.

By 09:35 ET, the U.S. crude futures traded 2.1% lower at $70.77 a barrel, while the contract dropped 1.8% to $75.74 a barrel. Both benchmarks closed at their lowest level since July 6 in the previous session.

Crude prices have plummeted over the past six weeks, with a bulk of losses coming in recent sessions after the Organization of Petroleum Exporting Countries and allies, a group known as OPEC+, largely underwhelmed markets with its plans to cut production further in 2024.

Concerns over China’s economic health, which could limit overall fuel demand in the world’s second-largest crude consumer, also weighed, especially after rating agency Moody’s (NYSE:) cut its outlook.

Additionally, data from industry group the showed that U.S. oil inventories grew 594,000 barrels in the week to Dec 1, compared to expectations for a draw of over 2 million barrels.

Official U.S. are due later in the session.

Additionally, rose 0.6% to $2,048.45/oz, while traded just lower at 1.0793.

(Oliver Gray contributed to this item.)

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