The S&P 500 surged to a new record on Wednesday, closing at 5,354.03, up 1.18%. It also hit an intraday high of 5,354.16, driven by gains in major tech stocks and slightly weaker labor market data, which fueled hopes for potential Federal Reserve interest rate cuts later this year. Year-to-date, the index has risen by 12.3%.

The Nasdaq Composite also set a new record, jumping 1.96% to 17,187.90, led by Nvidia's impressive performance. Nvidia shares rose by 5%, pushing the company's market value to $3 trillion after unveiling new chips that received positive feedback from Wall Street analysts. Bank of America predicts Nvidia could rally to $1,500, a 22% increase from its current price.

In contrast, the Dow Jones Industrial Average saw a modest gain of 0.25%, adding 96.04 points to close at 38,807.33, as non-tech stocks lagged behind.

Private payroll data from ADP showed a slowdown in hiring with 152,000 jobs added in the last month, missing the expected 175,000. This weakness in the labor market is seen as a potential catalyst for the Federal Reserve to consider cutting benchmark interest rates. Fed funds futures indicate a 69% chance of a rate cut in September.

Key Movers and Market Sentiment

• Nvidia: Up 5%, driven by AI advancements and new chip releases.
• Hewlett Packard Enterprise: Up 12% after exceeding revenue expectations.
• CrowdStrike: Increased by 11% following strong earnings and guidance.
• Meta Platforms: Added 2% amid overall tech sector strength.

Economic Outlook

UBS Global Wealth Management anticipates the S&P 500 reaching 5,500 by the end of the year, citing potential Fed rate cuts, robust profit growth, and the ongoing AI boom. They forecast the Fed to reduce rates twice this year, creating a favorable environment for stocks.

Investors are now looking ahead to Thursday's weekly jobless claims and Friday's May jobs report. Economists expect 190,000 jobs to have been added in May, up from 175,000 in April. These reports will be critical in shaping market expectations and the Fed's next moves.

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