US equity benchmarks were mixed on Wednesday as stronger than expected employment data raised concerns over future pace of rate cuts by the Federal Reserve.
At the time of writing, the Dow Jones Industrial Average was down 0.3%, while the S&P 500 index was little changed from the previous close.
The Nasdaq Composite was also flat at the time of writing.
Sentiments were hit after CNN reported that President-elect Donald Trump is considering declaring a national economic emergency to push through new tariffs.
Stocks were coming off a losing session from Tuesday.
The faster pace of growth in the US services sector weighed on major benchmarks on Tuesday.
The resilient economic state of the US is likely to prompt the Fed to slow down its monetary easing.
According to the CME’s FedWatch tool, markets are currently pricing in a 95% chance of no reductions at the central bank’s meeting this month.
“It’s fair to note that there’s an increasingly skittish tone to US equities. This is fairly typical when markets trade near extremes, whether around all-time highs, or after significant sell-offs,” David Morrison, senior market analyst at Trade Nation said.
Market participants become aware that the path of least resistance is no longer as obvious as it was before.
This leads to overreactions to otherwise minor events and announcements, exactly as seen over the last two trading sessions.
Jobless claims fall
Initial filings for unemployment benefits in the US fell last week.
This showed though the labour market was softening, job cuts were not happening.
People filing for unemployment benefits totalled 201,000 for the week ending January 4, down 10,000 from the previous week.
Claims were also the lowest in nearly one year. Economists polled by Dow Jones expected claims to be at 215,000.
The US private sector added 122,000 jobs in December
Private sector companies added less jobs in December than expected during December, according to the ADP’s National Employment Report.
Jobs added during December was less than November’s 146,000 figure, and also below expectations of 136,000 by Dow Jones.
Cal-Marine Foods surges
Shares of the egg production company surged more than 6% on Wednesday after it posted positive quarterly earnings results.
For the second quarter, the company earned $4.47 per share on revenue of $954.7 million.
Revenue rose 82% compared to the year-ago period.
According to a CNBC report, the results were not comparable to Wall Street’s estimates due to thin coverage of the stock.
Meanwhile, shares of SolarEdge Technologies dropped nearly 10% on Wednesday.
Citi downgraded the stock to sell from neutral. It also said the company is facing “stubbornly high” operating expenses despite its restructuring announcement.
Novo Nordisk and Maplebear jump
Shares of Novo Nordisk rose sharply on Wednesday.
The pharmaceutical stock was up 3% at the time of writing after UBS upgraded the stock to a buy rating from the previously neutral rating.
Meanwhile, shares of Maplebear surged more than 4% on Wednesday.
Shares of the parent of grocery delivery company Instacart had earlier risen 5% on Wednesday.
Maplebear is set to replace Enovis in the S&P MidCap 400 index.
The change will happen on January 14, according to CNBC.
Energy stocks fall
Shares of Exxon Mobil fell more than 1% on Wednesday after the oil major warned against declining profits.
The company said declining profits from oil refining operations along with weak returns would hit its fourth quarter earnings income by around $1.75 billion against the prior three-month period.
London-based Shell’s stock also dipped 1.2% on Wednesday.
The company said it will book a charge of $1.3 billion in the fourth quarter related to permits in Germany and the US.
It also said that earnings from its integrated gas division will also be “significantly lower” than the third quarter.
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