Dow rises as investors shake off weak jobs data, Microsoft decline: Live updates

The Dow Jones Industrial Average rose on Wednesday as traders moved past the latest jobs data from ADP as well as some pressure on Microsoft.

The 30-stock index gained 310 points, or 0.7%. The S&P 500 traded up 0.3%, while the Nasdaq Composite added 0.2%.

Microsoft shares fell more than 1% after The Information reported it was cutting software sales quotas tied to artificial intelligence. The stock came off its lows of the session after the company denied that they had lowered sales quotas for salespeople.

Other names linked to the AI trade, including chipmakers Nvidia and Broadcom, fell in sympathy with Microsoft. Nvidia was almost 1% lower, while Broadcom retreated more than 1%. Micron Technology was also under pressure, dropping more than 2%.

“The market is starting to separate the winners from the losers,” Scott Welch, Certuity’s chief investment officer, said in an interview with CNBC. “They’re all investing in each other, and the market hasn’t seen the results yet.”

“We’re in the very beginning of a transformational market, and one of the things that we’re paying attention to is how much debt these folks are taking on to finance their data centers and so forth,” he continued.

Payrolls processor ADP reported that private payrolls surprisingly declined by 32,000 in November. Economists polled by Dow Jones had expected an increase of 40,000 for the month. Despite the tough reading, traders were likely betting that the private job losses will lead the Federal Reserve to cut interest rates at its last meeting of the year next week as a way to rev up the U.S. economy after it’s seen some weakness.

“The labor market, that’s what people are going to focus on,” Welch said. “The numbers will come in as they come in, and it’ll either lead toward a cut or not, but I suspect that there’s no question there will be a cut next week.”

Markets are pricing a roughly 89% chance of a cut next Wednesday, which is much higher than the odds from mid-November, according to the CME FedWatch tool.

“The market is hinged on on the Fed, and so if they don’t cut, it’s not going to turn out well,” the investment head also said.

To be sure, Wednesday saw some evidence of a stable economy, as the latest U.S. services data came slightly better than expected.

The trading day had a few other bright spots as well. Bitcoin continued to gain, trading above $92,000, after the flagship cryptocurrency logged its worst day since March on Monday. Shares of Marvell Technology rose more than 3%, as Wall Street reacted to its data center growth projections. American Eagle Outfitters was another standout, rallying more than 15% after it became the latest retailer to lift its full-year forecast. The apparel company said the holiday shopping season was off to strong start.