The Dow Jones Industrial Average fell Wednesday as Wall Street waded through new economic data and awaited an afternoon speech on the economy from Federal Reserve Chair Jerome Powell.
The 30-stock index lost 186 points, or 0.6%. The S&P 500 shed 0.2%, while the Nasdaq Composite added 0.2%.
Traders were hit with conflicting economic reports Wednesday morning.
Payroll processing firm ADP said Wednesday that private companies added just 127,000 positions for the month, well below the 190,000 consensus estimate from economists polled by Dow Jones. It signaled the job market could be cooling, raising hopes the Federal Reserve would slow its aggressive rate-hiking campaign.
New Labor Department data showed job openings fell in October. However, there were still more openings than available workers.
The Bureau of Economic Analysis reported third-quarter GDP increased at a 2.9% annual rate, according to its second estimate. That was revised higher from the 2.6% first estimate, showing the economy is stronger than previously thought.
Meanwhile, pending home sales declined for the fifth consecutive month in October, according to data from the National Association of Retailers.
“The data was somewhat mixed,” said Edward Moya, senior market analyst at Oanda. “But it does show there’s a lot of resilience in this economy. And it still is highlighting a labor market that is weakening, but is still in relatively good shape. I think that we’re not going to get any answers on what will policy be like at the end of next year based on these reports.”
Investors are waiting for Powell’s speech at the Brookings Institution this afternoon that may give further insight into the central bank’s thinking on future interest rate increases.
The Fed is slated to meet later this month and is largely expected to deliver a smaller 0.5 percentage point rate hike after four consecutive 0.75 percentage point increases to tame high inflation. Any signal of a pivot on future rate hikes would likely send markets higher.
“All eyes will be on Chairman Powell’s speech today, but we don’t believe he will break any new ground,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance. “He wants the stock market lower and he’s willing to endure a recession in order to get inflation back under control.”
