Rate Cut Optimism May Lead To Continued Strength On Wall Street

The major U.S. index futures are currently pointing to a higher open on Wednesday, with stocks likely to add to the gains posted in the previous session.

The futures remained positive following the release of a report from payroll processor ADP showing an unexpected decrease by U.S. private sector employment in the month of November.

ADP said private sector employment fell by 32,000 jobs in November after climbing by an upwardly revised 47,000 jobs in October.

Economists had expected private sector employment to inch up by 10,000 jobs compared to the addition of 42,000 jobs originally reported for the previous month.

The unexpected pullback by private sector employment may add to recent optimism about another interest rate cut by the Federal Reserve at its monetary policy meeting next week.

CME Group’s FedWatch Tool is currently an 88.8 percent chance the Fed will cut interest rates by another 25 basis points.

Buying interest may also be generated in reaction to a continued surge by Bitcoin, as the cryptocurrency is jumping by more than 2 percent after soaring on Tuesday.

Stocks fluctuated over the course of the trading session on Tuesday after an early move to the upside but largely maintained a positive bias. The major averages all ended the day in positive territory, regaining ground following the pullback seen during Monday’s trading.

The tech-heavy Nasdaq advanced 137.75 points or 0.6 percent to 23,413.67, the Dow climbed 185.13 points or 0.4 percent to 47,474.46 and the S&P 500 rose 16.74 points or 0.3 percent to 6,829.37.

The strength on Wall Street came amid a substantial rebound by Bitcoin, as the cryptocurrency soared by more than 6 percent after moving sharply lower on Monday.

Bitcoin’s rally along with an advance by AI darling and market leader Nvidia (NVDA) may have been an indication of renewed risk appetite.

Semiconductor stocks helped lead the markets higher, with the Philadelphia Semiconductor Index jumping by 1.8 percent.

Considerable strength was also visible among computer stocks, as reflected by the 1.7 percent gain posted by the NYSE Arca Computer Hardware Index.

Airline and telecom stocks also saw notable strength on the day, while gold, natural gas and oil producer stocks moved to the downside.

Overall buying interest was somewhat subdued, as traders looked ahead to the release of some key U.S. economic data in the coming days.

The data could impact the outlook for interest rates ahead of the Federal Reserve’s monetary policy meeting next week.

Commodity, Currency Markets

Crude oil futures are surging $0.71 to $59.35 a barrel after slumping $0.68 to $58.64 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $4,251, up $30.20 compared to the previous session’s close of $4,220.80. On Tuesday, gold plunged $54.

On the currency front, the U.S. dollar is trading at 155.41 yen compared to the 155.85 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.1670 compared to yesterday’s $1.1623.

Asia

Asian stocks ended mixed on Wednesday as a cryptocurrency rebound lost steam and focus shifted to key U.S. economic data and upcoming central bank decisions.

The dollar extended losses, while gold held steady above $4,200 an ounce ahead of an anticipated rate cut at next week’s FOMC meeting.

Traders also awaited ADP employment and ISM Services PMI data later in the day, followed by Friday’s PCE Price Index, the Fed’s preferred inflation measure, for additional clues on the economic and rate outlook.

Oil edged up slightly in Asian trading after high-level talks between Russia and the United States over a U.S.-proposed peace plan for the Russia-Ukraine conflict ended late on Tuesday without a breakthrough.

Chinese and Hong Kong markets underperformed after the release of weak services data and amid deepening property stress.

A private survey showed growth in China’s services sector slipped to a five-month low in November. Bearish bets on China Vanke Co. climbed to a decade high in Hong Kong as the homebuilder seeks to delay a bond repayment by one year.

China’s Shanghai Composite Index fell 0.5 percent to 3,878, while Hong Kong’s Hang Seng Index slumped 1.3 percent to 25,760.73.

Japanese markets rose sharply as technology stocks tracked Wall Street higher. The Nikkei 225 Index shot up 1.1 percent to 49,864.68, while the broader Topix Index closed 0.2 percent lower at 3,334.32. Advantest, Tokyo Electron, Renesas Electronics and SoftBank Group surged 5-7 percent.

Seoul stocks rallied after revised central bank data showed South Korea’s economy expanded at the fastest pace in almost four years in the third quarter on strong exports, despite the impact of tariff issues and global uncertainties. The Kospi jumped 1.0 percent to 4,036.30.

Samsung C&T shares soared 9.4 percent following reports that Hong Ra-hee, honorary director of Leeum Museum of Art and widow of late Samsung Chairman Lee Kun-hee, will give all of her 1.06 percent stake in the trading firm to her eldest son and Samsung Electronics Co. Executive Chairman Jay Y. Lee.

Australian markets ended slightly higher as data showed Australian GDP rose 2.1 percent year-over-year in the third quarter of 2025, marking its strongest expansion since the third quarter of 2023.

In addition, the country’s services sector expanded at a faster pace in November, with a PMI of 52.8. The benchmark S&P/ASX 200 Index edged up by 0.2 percent to 8,595.20, led by utilities, real estate and tech stocks. The broader All Ordinaries Index closed up 0.2 percent at 8,894.20.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index climbed 0.6 percent to 13,582.54, extending gains from the previous session.

Europe

European stocks are turning in a mixed performance during trading on Wednesday as traders digest the latest economic data from the region.

While the U.K.’s FTSE 100 Index is down by 0.1 percent, the French CAC 40 Index is up by 0.1 percent and the German DAX Index is up by 0.3 percent.

The Eurozone private sector logged its strongest growth since May 2023 as both manufacturing and service sectors showed expansion in output, final data from S&P Global revealed Wednesday.

The HCOB final composite output index rose to 52.8 in November from 52.5 in the previous month. The reading was above the initial score of 52.4.

The survey showed stronger services momentum in November, while factory output growth moderated to a nine-month low.

A separate report from Eurostat showed Eurozone producer prices rose marginally in October after two consecutive decreases.

Producer prices edged up 0.1 percent month-on-month in October, offsetting a 0.1 percent drop in September. Excluding energy prices, producer prices remained flat for the fourth straight month.

Zara owner Inditex has soared after sales grew 10.6 percent over the start of its fourth quarter, buoyed by strong demand for its fall and winter collections.

Plane maker Airbus has also shown a strong move to the upside in Paris after backing its full-year adjusted EBIT view.

Meanwhile, Hugo Boss shares have plunged after the German fashion group said it expects falling sales and profits for 2026 before returning to growth from 2027.

Sainsbury’s has also slumped after Qatar’s sovereign wealth fund sold a stake worth about £266 million ($352 million) in the British supermarket group.

U.S. Economic News

A report released by payroll processor ADP on Wednesday showed an unexpected decrease by private sector employment in the U.S in the month of November.

ADP said private sector employment fell by 32,000 jobs in November after climbing by an upwardly revised 47,000 jobs in October.

Economists had expected private sector employment to inch up by 10,000 jobs compared to the addition of 42,000 jobs originally reported for the previous month.

“Hiring has been choppy of late as employers weather cautious consumers and an uncertain macroeconomic environment,” said ADP chief economist Dr. Nela Richardson. “And while November’s slowdown was broad-based, it was led by a pullback among small businesses.”

The Labor Department released a long-delayed report on Wednesday showing U.S. import and exports both came in flat in the month of September.

The report said import prices came in unchanged in September following a downwardly revised 0.1 percent uptick in August.

Economists had expected import prices to inch up by 0.1 percent compared to the 0.3 percent increase originally reported for the previous month.

The Labor Department said export prices also came in unchanged in September following a downwardly revised 0.1 percent uptick in August.

Economists had expected export prices to creep up by 0.1 percent compared to the 0.3 percent growth originally reported for the previous month.

At 9:15 am ET, the Federal Reserve is scheduled to release its long-delayed report on industrial production in the month of September. Industrial production is expected to come in unchanged in September after inching up by 0.1 percent in August.

The Institute for Supply Management is due to release its report on service sector activity in the month of November at 10 am ET. The ISM’s services PMI is expected to edge down to 52.1 in November from 52.4 in October, but a reading above 50 would still indicate growth.

At 10:30 am ET, the Energy Information Administration is due to release its report on crude oil inventories in the week ended November 28th. Crude oil inventories are expected to decrease by 1.9 million barrels after climbing by 2.8 million barrels in the previous week.