Wall Street’s main stock indices dipped on Wednesday after data showed US businesses unexpectedly shed jobs last month.
The US private sector shed 32,000 jobs in November, according to payroll firm ADP, compared to a small gain expected by analysts.
The jobs numbers reinforced concerns over the health of the US economy, which has struggled with dislocations and price rises caused by tariffs introduced by President Donald Trump’s administration.
The Dow dipped by less than a tenth of a percentage point at the opening bell, while the S&P 500 shed 0.2 percent and the tech-heavy Nasdaq dropped 0.5 percent.
Tech stocks were weaker, with shares in the so-called Magnificent Seven largest tech firms down 0.3 percent overall. Shares in Microsoft were down 2.8 percent.
The surprise drop in employment underpinned expectations that the US Federal Reserve will cut interest rates next week.
“The justification for a rate cut next week centres around weakness in the (US) jobs market,” noted Joshua Mahony, chief market analyst at trading group Scope Markets.
Money markets have put the chances of the Fed cutting interest rates on December 10 at nearly 90 percent.
Lower interest rates make it easier for companies and consumers to borrow money, and thus the prospect of Fed rate cuts tend to boost stocks.
Optimism over US rate cuts won an additional boost from reports that Trump’s top economic adviser Kevin Hassett -- a proponent of more reductions -- is the frontrunner to take the helm at the Fed when Jerome Powell’s tenure ends in May.
While a number of bank decision-makers have thrown their hat in the ring for a reduction, there remains differences on the policy board about the need to target the soft labour market or stubbornly high inflation.
With a cut to US interest rates expected, trading has softened ahead of key indicators this week that could still play a role in the central bank’s planning over the next year.
The Fed’s preferred gauge of inflation -- personal consumption expenditure (PCE) index -- will be released on Friday.
Investors see the Fed cutting rates three times next year, which has been a factor weighing on the dollar.
A recovery in Bitcoin has also helped support equity markets.
“A continued bounce in bitcoin and other cryptocurrencies has stoked a renewed speculative bid,” said Briefing.com analyst Patrick O’Hare.
Bitcoin is back above $90,000. It plunged below $83,000 last month after having set a record high of $126,251 in October.
European stocks were just below the break-even point in afternoon trading.
Asian stock markets mostly rose Wednesday.
The pound was up 0.7 percent against the dollar on UK data showing stronger than expected British services sector activity.
Stronger sterling weighed on London’s benchmark FTSE 100 stock index, which features major companies earning in dollars.
Elsewhere, the Indian rupee weakened past 90 per dollar for the first time, extending declines through the year as New Delhi struggles to strike a trade deal with the United States.
New York - Dow: DOWN less than 0.1 percent at 47,434.68 points
New York - S&P 500: DOWN 0.2 percent at 6,841.32
New York - Nasdaq Composite: DOWN 0.5 percent at 23,315.58
London - FTSE 100: DOWN less than 0.1 percent at 9,696.83
Paris - CAC 40: DOWN less than 0.1 percent at 8,069.52
Frankfurt - DAX: DOWN less than 0.1 percent at 23,697.98
Tokyo - Nikkei 225: UP 1.1 percent at 49,864.68 (close)
Hong Kong - Hang Seng Index: DOWN 1.3 percent at 25,760.73 (close)
Shanghai - Composite: DOWN 0.5 percent at 3,878.00 (close)
Euro/dollar: UP at $1.1657 from $1.1622 on Tuesday
Pound/dollar: UP at $1.3296 from $1.3209
Dollar/yen: DOWN at 155.50 yen from 155.86 yen
Euro/pound: DOWN at 87.68 pence from 88.00 pence
Brent North Sea Crude: UP 0.7 percent at $62.89 per barrel
West Texas Intermediate: UP 0.8 percent at $59.12 per barrel
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