U.S. stock futures signaled a stronger start on Wednesday, suggesting that equities may extend the gains recorded in the previous session.
Futures held in positive territory after new data from ADP showed an unexpected contraction in private-sector employment for November. According to the report, private payrolls declined by 32,000 last month, following a revised increase of 47,000 in October. Economists had been looking for a modest gain of about 10,000 jobs versus the originally reported 42,000 rise in October.
The surprise drop in private hiring has added fuel to growing expectations that the Federal Reserve will deliver another rate cut when policymakers meet next week. The CME FedWatch Tool now shows an 88.8% probability of a 25-basis-point reduction.
Risk appetite may also get an additional lift from the ongoing rebound in Bitcoin, which is up more than 2% early Wednesday after a sharp surge on Tuesday.
On Tuesday, U.S. markets spent much of the day wavering after an early rally but ultimately held a generally positive tone. All three major indexes finished higher, recouping some of Monday’s losses.
The Nasdaq climbed 137.75 points, or 0.6%, to 23,413.67. The Dow added 185.13 points, or 0.4%, to close at 47,474.46, and the S&P 500 gained 16.74 points, or 0.3%, to reach 6,829.37.
The renewed strength on Wall Street coincided with a sizable rebound in Bitcoin (COIN:BTCUSD), which surged more than 6% after Monday’s steep drop. Gains in Nvidia (NASDAQ:NVDA)—often viewed as a key bellwether for risk appetite—helped reinforce the positive sentiment.
Chipmakers led the rally, with the Philadelphia Semiconductor Index jumping 1.8%. Computer hardware stocks also performed well, as the NYSE Arca Computer Hardware Index advanced 1.7%.
Airline and telecommunications shares posted solid gains, while gold miners and energy producers tied to natural gas and oil moved lower.
Despite Tuesday’s upside, overall buying conviction remained somewhat muted as traders await several important U.S. economic releases scheduled over the next few days. These reports could shape market expectations ahead of next week’s Federal Reserve policy announcement.