S&P 500 Advances to Fresh Peak as Markets Digest Economic Signals

U.S. equities posted a subdued session Wednesday, with major indices displaying divergent momentum despite recent gains. The S&P 500 managed to edge higher by 13.31 points, or 0.2 percent, landing at 6,958.13 after touching a fresh intraday record. The Nasdaq outperformed the broader market, climbing 131.98 points or 0.6 percent to 23,679.15, while the Dow retreated 123.60 points or 0.3 percent to 49,338.48, pulling back from an earlier peak.

Economic Data Shapes Market Direction

Market participants shifted their focus to fundamental catalysts, particularly employment figures and services activity. The ADP employment report revealed private sector job growth came up short of forecasts, with employers adding 41,000 positions in December versus the anticipated 47,000. November’s figure was revised downward to a loss of 29,000 jobs. The U.S. job openings report for November also disappointed, falling more sharply than economists projected.

The services sector told a different story. The Institute for Supply Management’s services index surged to 54.4 in December from 52.6 in November, defying expectations for a decline to 52.3. This reading marks the strongest showing since October 2024, signaling robust expansion in the nation’s service-oriented economy.

Sector Performance Divergence

Beneath the surface, market internals revealed selective strength. Pharmaceutical stocks emerged as standout performers, propelling the NYSE Arca Pharmaceutical Index to a record intraday high with a 1.9 percent advance. Software shares also attracted buying, with the Dow Jones U.S. Software Index gaining 1.8 percent. Biotechnology stocks joined the rally, while precious metals faced headwinds, sending the gold sector lower by 1.6 percent.

Financial services, computer hardware, and utilities sectors struggled, providing counterbalance to strength elsewhere.

Global Markets Show Mixed Signals

Asian markets delivered a split performance. Japan’s Nikkei 225 declined 1.1 percent, while Shanghai Composite edged up 0.1 percent and South Korea’s Kospi advanced 0.6 percent. European bourses followed suit with divergent trends: the FTSE 100 slipped 0.6 percent, though the DAX surged 0.9 percent and the CAC 40 gained 0.2 percent.

Bond Market Response

Treasury yields retreated as investors assessed the employment weakness. The ten-year yield declined 3.5 basis points to 4.144 percent, reflecting the inverse relationship between rates and bond prices in response to softer labor market signals.

Looking ahead, Friday’s official employment report carries significant weight, with consensus forecasting 60,000 jobs added in December and the unemployment rate tightening to 4.5 percent.