Stocks closed at record highs on Wednesday as investors bet on a potential rate cut from the Federal Reserve later this month after the release of weaker-than-expected economic data.
The Dow Jones Industrial Average gained 179.32 points to end the day at 26,966, notching intraday and closing all-time highs. The Nasdaq Composite advanced 0.7% to 8,170.23.
The  also rose 0.7% to 2,995.82 as the real estate and consumer sectors powered the broad index to record levels. Tech also boosted the index, rising 0.7% to a record high. The S&P 500 closed just 0.1% below 3,000.
"The first time we get there you'll probably see some profit-taking," said Scott Redler, partner with T3live.com. "If technology continues to be strong and the semiconductors get some kind of bounce, that could probably push the S&P 500 through it 3,000. It's good to see the FANG names show some power."
Shares of Facebook, Amazon, Netflix and Google-parent Alphabet all rose on Wednesday. The session ended at 1 p.m. ET due to the Fourth of July holiday.
Private payrolls in the U.S. increased by 102,000 in June, ADP and Moody's Analytics said. Economists polled by Dow Jones expected growth of 135,000.
The disappointing data strengthens the Fed's case for lowering rates at its monetary policy meeting at the end of July. Last month, the central bank opened the door to easier monetary policy by stating it will "act as appropriate" to maintain the current economic expansion.
"As you look around the globe, general business indicators are showing some slowing and it seems like now we're starting to see a bit of slowing in the United States," said Scott Colyer, chief investment officer at Advisors Asset Management. But "in this recovery we have a very involved central bank, and really global central banks, applying quantitative easing."
"There's virtually 100% chance that the Fed will lower rates at the July meeting. I think the Fed will see the economic indicators in the United States are beginning to slow."
A tweet from President Donald Trump calling for easier monetary policy added to expectations of easier Fed policy. Trump said the U.S. should "match" monetary policies from China and Europe, noting they are "playing big currency manipulation game and pumping money into their system in order to compete with USA."
The U.S. dollar fell after Trump's tweet, but remained little changed on the day. The benchmark 10-year Treasury yield fell to its lowest level since 2016 on Wednesday, falling further below 2%.
Wall Street has been clamoring for lower rates after the Fed hiked four times in 2018. Tim Courtney, chief investment officer at Exencial Wealth Advisors, thinks investors should be careful with what they wish for.
"The market is a little bit optimistic, not only about a cut but what it represents," Courtney said. "I don't think the Fed wants to send a signal that things are weakening unless they really are."
Wall Street got off to a strong start this week following a trade truce between the two world's two largest economies. The S&P 500 is up more than 1% week to date and has posted back-to-back record closes.
The U.S. and China agreed to restart trade talks over the weekend, after President Donald Trump offered concessions — including no new charges and an easing of restrictions on tech company Huawei — to soothe tensions with Beijing.
However, the initial enthusiasm over the latest trade truce between Washington and Beijing has since been overtaken by intensifying concerns over the Trump administration's threat of tariffs on additional European goods.
The U.S. Trade Representative's office released a list of products — including olives, Italian cheese, and Scotch whiskey — that could be hit with new levies in addition to those introduced in April. It comes after the U.S. government threatened to impose tariffs on $4 billion worth of EU goods on Monday, as part of a long-running dispute over aircraft subsidies.
In corporate news, Tesla shares jumped more than 4% after the auto maker reported record delivery and production numbers. Meanwhile, Symantec surged 13.6% on news the company is in talks to be acquired by Broadcom. The two companies are targeting an announcement by mid-July.
—CNBC's Sam Meredith and Patti Domm contributed to this report.