U.S. stocks retreated on Wednesday as investors assessed data indicating falling inflation and the jobs report loomed.
The Dow Jones industrial Average lost 70.13 points, or 0.19%, to close at 36,054.43. The S&P 500 shed 0.39% to 4,549.34, while the Nasdaq Composite dropped 0.58% to 14,146.71. It was the third losing day for the 30-stock Dow and the S&P 500 — the first since October for both indexes.
Stocks relinquished earlier advances, with the Dow at one up nearly 170 points at its session high. All three indexes traded both above and below their respective flatlines in the choppy session.
The market initially got a morning boost after economic data. A drop in labor costs boded positively for the path of inflation, while a jump in productivity signaled the potential for the economy to skirt a recession. November private payroll data from ADP offered the latest indication that the job market, long considered a pain point for the Federal Reserve, was easing.
"ADP's payroll data shows the Fed's anti-inflation treatment is now really taking effect," said David Russell, global head of market strategy at online investing platform TradeStation. "The numbers point toward a soft landing, but investors may start to worry about a recession if policy remains too hawkish. It's the Fed's battle to lose at this point."
But Wednesday's ADP report is just one in a string of labor-focused data releases traders are weighing over the course of the week. On Tuesday, Labor Department figures showed job openings in October fell to the lowest level since March 2021. Investors will monitor jobless claims numbers on Thursday before turning attention to widely followed data on November nonfarm payrolls, wages and the unemployment rate due Friday.
"There's no getting around the fact that the data at the end of the week … is the one everyone is eagerly waiting for," said Craig Erlam, senior market analyst at Oanda.
Labor costs also fell more than economists expected, while productivity increased at a higher rate than anticipated, new government data showed.
Wednesday marked the third straight losing session for the Dow and S&P 500. Those declines raised questions around whether the late 2023 rally was taking a pause or if the market had run up too far, too fast. Still, the three major indexes remain poised to finish the fourth quarter and calendar year higher.
Cloud company Box more than tumbled 10% after reporting third-quarter results that came in below analyst expectations. On the other hand, homebuilder stock Toll Brothers gained nearly 2% after exceeding expectations on the top and bottom lines.
Stocks end Wednesday lower
U.S. crude falls below $70 a barrel, closing at lowest since June
U.S. crude fell 4% on Wednesday, closing at its lowest point since June with retail gasoline hitting its cheapest since January.
U.S. crude and the global benchmark have fallen for five straight days, despite efforts by OPEC+ to boost prices by promising to slash supply in the first quarter of 2024.
Prices at the pump in the U.S., meanwhile, have followed oil prices lower to hit $3.22 a gallon on average as of Wednesday, the lowest price since Jan. 3, according to AAA.
— Spencer Kimball