U.S. equities and stock exchange traded funds climbed Wednesday as strong private sector-jobs data fueled optimism over continued economic growth.
The S&P 500 Index, along with related funds including the SPDR S&P 500 ETF (NYSEArca: SPY), iShares Core S&P 500 ETF (NYSEArca: IVV) and Vanguard 500 Index (NYSEArca: VOO), were up 0.8% Wednesday.
Payrolls processor ADP revealed that U.S. companies added a better-than-expected 263,000 workers in March, the most since December 2014, signaling a further tightening of the labor market, reports Herbert Lash for Reuters. In contrast, economists’ projected a median 187,000 increase.
“The ADP survey is clearly another indication that, despite the apparent slowdown in GDP growth in the first quarter, labor market conditions have remained unusually strong,” Capital Economics economist Andrew Hunter told Reuters.
The ADP data came out ahead of the Labor Department’s monthly non-farm payrolls report on Friday, which is comprised of both public and private-sector data.
A strong U.S. jobs report on Friday would “make an even better case for the Fed to continue its tightening and maybe increase the probability that they could move three more times this year,” David Coard, head of fixed income sales and trading at Williams Capital Group, told Reuters.
U.S. markets rallied on the upbeat data, despite concerns over the Trump administration’s ability to deliver on promised policy changes, such as corporate tax cuts or deregulation.
Minutes from the latest meeting of the Federal Reserve will also be revealed later Wednesday, providing clues on the path of the central bank’s monetary policy as well as how Fed will unwind its $4.5 trillion balance sheet, Bloomberg reports.
Looking ahead, an account of the European Central Bank’s latest policy gather is expected on Thursday, and China’s President Xi Jinping will also be meeting President Donald Trump for two days starting Thursday.
For more information on the markets and U.S. Stock ETFs, visit our S&P 500 category.