Stocks gain on upbeat start to June trading

U.S. stocks pared gains in early trade on Wednesday after stronger-than-expected U.S. manufacturing data and harsh comments from JPMorgan Chase & Co.JPMorgan) owner Jamie Dimon.

Led by a 1% gain in the Nasdaq, the three major indexes rebounded before the open, all turning negative about 80 minutes into the session.

The S&P 500 and Dow both lost 0.7%, while the Nasdaq lost 0.3%. The Russell 2000 was the biggest loser, down as much as 0.9%.

U.S. manufacturing grew faster than expected in May, data from the Institute for Supply Management showed, another sign that fears of an imminent U.S. economic downturn may be overblown.

The manufacturing data was followed by a headline from Dimon, who told Bernstein’s strategic decision-making meeting that the U.S. economy was facing a “hurricane” as the Fed continued its process of normalizing interest rates.

The BLS job openings report for April also showed a decline in the number of job openings, a data point the Fed may view positively as it works to cool the labor market.

One Upbeat earnings report from Salesforce (customer relationship management) boosted investor sentiment on Tuesday night after the software company raised its earnings forecast and said macroeconomic uncertainty did not have any material impact on operations.

The outlook contrasts sharply with some downbeat quarterly results from some corporate peers, which suggest trouble ahead for rising costs and supply chain imbalances. Shares of Salesforce surged 12% at the open.

“We just don’t see a significant impact on the wider economic world that you all live in,” Salesforce CEO Mark Benioff said on the earnings call.

in a Meeting with Fed Chairman Jerome Powell On Tuesday, President Joe Biden discussed inflation — his administration’s “top economic priority” — while shifting responsibility to the central bank and stressing its independence. The meeting followed a Wall Street Journal op-ed by Biden emphasizing his focus on taming soaring prices.

“At the end of the day, inflation is the biggest political challenge,” Matthew Miskin, co-chief investment strategist at John Hancock Investment Management, told Yahoo Finance Live on Tuesday. “To reduce inflation, [the Fed has] The economy must be pulled down. “

June also marked the beginning of the Fed’s process of shrinking its $8.9 trillion balance sheet. The central bank is expected to add another 50 basis points when officials hold their next policy-setting meeting later this month.

Wednesday’s early move follows An eventful May on Wall Street It is marked by fears of a recession, decades of high inflation and rising interest rates.

Despite a month of wild swings in the stock market, the S&P 500 gained less than 1% — even after a seven-week losing streak briefly dragged the index into bear market territory. The Dow Jones Industrial Average also closed slightly higher in May, while the Nasdaq Composite extended its losses for the month amid a continued rotation of tech stocks.

Over the past decade, June has returned an average of 1.4%, the fourth-best month of the year, according to LPL Financial. However, the month has been weak for the past 20 years, with only September showing a worse performance for stocks.

“June was good for everyone, as historically it’s certainly been a very weak month, but it has been strong over the past decade,” Ryan Detrick, chief market strategist at LPL Financial, said in a note. However, after the sharp rebound in late May, we would not be surprised if the recent strength continues into a potential summer rally.”

Stock market returns have historically been lower in summer months compared to winter and early spring, Bespoke Investment Group said in a report Tuesday. The Dow Jones Industrial Average rose an average of 0.47% in June of the last century, but the positive return for the month was a “coin toss,” with gains only 52% of the time, according to the firm.

10:46 a.m. ET: Jamie Dimon says a ‘hurricane’ is about to hit the U.S. economy

JPMorgan (JPMorgan) CEO Jamie Dimon made a splash Wednesday with comments at an investor conference.

Speaking at Bernstein’s Strategic Decisions Conference, Dimon said the U.S. economy is facing a “hurricane” as the Fed continues its process of normalizing interest rates. Dimon said he had previously called the looming challenges facing the economy a “dark cloud.”

“Right now, the weather is fine and everything is fine,” Dimon said at the meeting, according to S&P Capital IQ’s transcript. “Everyone thinks the Fed can handle this. That hurricane is on its way and it’s coming to us. . We just don’t know if it’s a minor hurricane or superstorm Sandy … or Andrew or anything like that. You gotta prepare yourself.”

Dimon added that he thinks the banking sector is in good shape, as are consumers with more than $2 trillion in savings.

“Jobs are plentiful, wages are rising, and consumers are spending,” Dimon said. “[The] Low income people, not as much as they used to, but everyone else, looks like they have $2 trillion in savings…I don’t think that’s going to stop…consumption [in] 6 or 9 months. So for me, there are bright clouds. “

—Myles Udland, Senior Marketing Editor

10:20AM ET: Manufacturing activity remains resilient in May

Two data on U.S. manufacturing in May showed continued growth as investors worried that the economy was about to slow.

This Institute for Supply Management Manufacturing Purchasing Managers’ Index It was 56.1 in May, up from 55.4 in April, marking the 24th consecutive monthly increase.S&P Global US Manufacturing Purchasing Managers Index It was 57 in May, down from 59.2 in April.

For both reports, any reading above 50 points to expansion in the sector, while readings below 50 indicate contraction.

However, the data was not all smooth sailing, with the ISM employment index unexpectedly falling last month. In addition, the S&P report showed that business confidence fell to its lowest level since October 2020.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said: “A solid expansion in manufacturing output in May should help boost GDP growth in the second quarter, with output growth well above the average of the past decade. “However, the pace of growth has slowed as producers report supply chain delays and labor shortages, as well as slowing demand growth.”

Commenting on ISM’s latest report, Tim Fiore, chair of the ISM’s Manufacturing Business Survey, said, “The U.S. manufacturing sector remains in a demand-driven, supply-chain-constrained environment. Businesses’ performance despite a contraction in the May employment index Improvements. Progress in addressing medium-term labor shortages at all levels of the supply chain.”

—Myles Udland, Senior Marketing Editor

10:07 a.m. ET: Job openings slip in April

The latest JOLTS — or Job Openings and Workforce Turnover Survey — Report It showed 11.4 million job openings on the last working day in April, down from 11.86 million the previous month. Economists expect the report to show 11.35 million job openings at the end of April.

The biggest declines by industry were in healthcare and social work, retail and food services, all of which saw openings fall by more than 100,000 from March to April, according to the Bureau of Labor Statistics.

Economists are closely watching job openings for signs that the labor market may be cooling, with Federal Reserve Chairman Jay Powell telling reporters last month that the number of job openings relative to unemployed workers indicated an “imbalance” in the labor market.

Wednesday’s data suggested the market may be taking a step toward a rebalancing.

—Myles Udland, Senior Marketing Editor

9:33am ET: Wall Street starts June with gains after ending turbulent month

Here’s where the major indexes are trading at the start of Wednesday’s session:

  • S&P 500 (^GSPC): +24.02 (+0.58%) to 4,156.17

  • road (^DJI): +239.63 (+0.73%) to 33,229.75

  • Nasdaq (^IXIC): +93.71 (+0.78%) to 12,175.10

  • thick(CL=F): +$2.02 (+1.76%) to $116.69 a barrel

  • gold (GC=F): +$1.00 (+0.05%) to $1,849.40 per ounce

  • 10-year Treasury note (^TNX): -0.2 bps yield is 2.8420%

7:22 a.m. ET: Futures struggle to find direction as investors prepare for June trading

Here are the key moves in early Wednesday morning trading after Wall Street ended a turbulent month:

  • S&P 500 futures (ES=F): +6.25 (+0.15%) to 4,137.50

  • Dow futures (YM=F): +132.00 (+0.40%) to 33,103.00

  • Nasdaq Futures (NQ=F): -1.25 (-0.01%) to 12,645.25

  • thick(CL=F): +$1.38 (+1.20%) to $116.05

  • gold (GC=F): -$14.70 (-0.80%) to $1,833.70/oz

  • 10-year Treasury note (^TNX): +10.1 basis points, yield 2.8440%

NEW YORK, NY - MAY 25: Traders start the trading day with a moment of silence on the floor of the New York Stock Exchange (NYSE) on May 25, 2022 in New York City for victims of the Texas school shooting. At least 21 people were killed, including 19 children.  (Photo by Spencer Platt/Getty Images)

NEW YORK, NY – MAY 25: Traders start the trading day with a moment of silence on the floor of the New York Stock Exchange (NYSE) on May 25, 2022 in New York City for victims of the Texas school shooting. At least 21 people were killed, including 19 children. (Photo by Spencer Platt/Getty Images)

Alexandra Semenova is a reporter for Yahoo Finance.Follow her on Twitter @alexandraandnyc

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