U.S. markets and stock exchange traded funds pushed higher on their first day of the new quarter as traders grew optimistic over improving labor market data and the prospects of a COVID-19 vaccine, despite concerns over more lockdowns to contain a spike in new coronavirus cases.
On Wednesday, the Invesco QQQ Trust (NASDAQ: QQQ) was up 1.1%, SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) gained 0.1% and SPDR S&P 500 ETF (NYSEArca: SPY) rose 0.8%.
The ADP National Employment Report revealed the nonfarm private sector created 2.4 million jobs in June, and 70% of new jobs were from the leisure, hospitality, trade, and construction industries, the Wall Street Journal reports.
“The first half was surprise after surprise,” Lindsey Bell, the chief investment strategist at Ally Invest, told the WSJ. “Now we’re starting to get surprises to the upside. I think the second half will be all about making sure that the recovery continues at a solid clip.”
Further supporting the positive economic outlook, the Institute for Supply Management’s June manufacturing index rose to a better-than-expected 52.6 from 43.1 in May – levels above 50 indicated an expansion.
“The manufacturing number adds a boost to investor confidence. And now the market is positioning itself in anticipation for tomorrow’s numbers,” Andre Bakhos, managing director at New Vines Capital LLC, told Reuters.
The markets also received a positive injection on developments in for a COVID-19 vaccine by Pfizer Inc and German biotech firm BioNTech, which showed promise after patients responded positively in an early-stage human trial.
“The COVID-19 is the linchpin to the market right now,” Bakhos said, adding that markets in general reacted positively to these bits of news as they are all tied to COVID-19.
Investors will be watching for minutes of the Federal Reserve’s most recent monetary-policy meeting, where the central bank signaled its intent to maintain interest rates near zero for the foreseeable future.
For more information on the markets, visit our current affairs category.