US stocks dip as investors assess data, Trump's economic emergency plan

US stocks dipped on Wednesday, as uncertainty prevailed on Wall Street after the release of two sets of jobs data and a report that said President-elect Donald Trump was mulling a national economic emergency declaration. 

At 9:52 a.m. the Dow Jones Industrial Average fell 117.37 points, or 0.28 per cent, to 42,410.99, the S&P 500 lost 6.27 points, or 0.11 per cent, to 5,902.76 and the Nasdaq Composite lost 9.11 points, or 0.05 per cent, to 19,480.57. 

The Russell 200 index tracking domestically focused small-cap companies dropped 1.5 per cent. 

 

Markets assessed an ADP National Employment Report that showed private payrolls growth slowed sharply in December, although a separate Labor Department report said jobless claims for the previous week fell.  "It seems as if one report is contradicting the other. The reduction in jobless claims implies that more people are getting work, whereas the ADP number shows that fewer people got work than expected," said Sam Stovall, chief investment strategist at CFRA. 

Stovall added that markets were volatile as investors were trying to ascertain what this data implies for Friday's payroll numbers. 

Megacaps were mixed with Nvidia adding 1.8 per cent, Alphabet flat and Meta falling 0.7 per cent. 

A majority of the 11 S&P 500 sectors were in the red, led by a 1 per cent decline in utilities, pressured by Treasury yields which stood at multi-month highs. 

A broadly healthy labor market is allowing the Fed to stay put on interest rates. However, traders now expect the first trim this year in either May or June, according to the CME Group's FedWatch Tool. 

Fed Governor Christopher Waller said inflation should continue falling in 2025 and allow the central bank to further reduce interest rates, though at an uncertain pace. Minutes from the Fed's December meeting is due at 2:00 p.m. ET. 

Market sentiment was also fragile after a CNN report said that Trump was mulling on building the new tariff program by using the International Economic Emergency Powers Act, which authorizes a president to manage imports during a national emergency. 

Ahead of Trump taking office later in the month, reports around potential surcharges on US trade partners have kept investors on edge on concerns that his policies including mass deportations and tariffs could spark a global trade war and stoke inflation pressures. 

Worries about higher inflation following upbeat economic data weighed on the benchmark S&P 500 and the tech-heavy Nasdaq on Tuesday, when the indexes logged their biggest daily declines since the Fed's December meeting in which the central bank issued a cautious stance on upcoming interest rate cuts. 

Advanced Micro Devices dropped 3.8 per cent after brokerage HSBC downgraded the stock to "reduce" from "buy". 

Quantum-computing stocks Rigetti Computing fell 41.5 per cent, IonQ dropped 36.5 per cent and Quantum Computing lost 40.6 per cent after Nvidia boss Jensen Huang said computers based on the emerging technology are as much as 30 years away. 

Markets will be closed on Thursday for a national day of mourning to mark the death of former President Jimmy Carter. 

Declining issues outnumbered advancers by a 3.88-to-1 ratio on the NYSE and by a 4.22-to-1 ratio on the Nasdaq. 

The S&P 500 posted four new 52-week highs and 24 new lows, while the Nasdaq Composite recorded 20 new highs and 78 new lows.   

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