U.S stocks jumped early Wednesday as Wall Street entered a fresh month of trading.
The S&P 500 climbed 0.7%, while the Dow Jones Industrial Average gained 260 points, or 0.8%. The Nasdaq Composite rose 1%.
An upbeat earnings report from Salesforce (CRM) late Tuesday gave sentiment a boost after the software company raised its profit forecast and said it did not see any significant impact on operations from macroeconomic uncertainty.
The outlook comes in contrast with some downbeat quarterly results from some corporate peers that signaled struggles with rising costs and supply chain imbalances ahead. Shares of Salesforce surged as much as 12% at the open.
“We’re just not seeing material impact on the broader economic world that all of you are in,” Salesforce Chief Executive Officer Marc Benioff said in an earnings call.
In a meeting with Federal Reserve Chair Jerome Powell on Tuesday, President Joe Biden discussed inflation — a “top economic priority” of his administration — while shifting responsibility to the central bank and emphasizing its independence. The meeting followed a Wall Street Journal op-ed by Biden underscoring his focus on taming soaring prices.
“At the end of the day, inflation is the biggest political challenge that is out there,” John Hancock Investment Management Co-Chief Investment Strategist Matthew Miskin told Yahoo Finance Live on Tuesday. “To bring down inflation, [the Fed has] got to bring down the economy.”
June also marks the beginning of the Federal Reserve process to begin shrinking its $8.9 trillion balance sheet. The central bank is also expected to raise interest rates by another 50 basis points when officials meet for their next policy-setting meeting later this month.
Wednesday’s early moves follow an eventful May on Wall Street marked by worries of a recession, decades-high inflation levels and rising interest rates.
Despite a month of sharp gyrations in equity markets, the S&P 500 churned out a small gain of less than 1% – even after seven consecutive weeks of losses briefly dragged the index into bear market territory. The Dow Jones Industrial Average also closed slightly up for May, while the Nasdaq Composite deepened losses for the month amid a continued rotation out of technology stocks.
In the past decade, the month of June has returned an average 1.4%, ranking it the fourth best month of the year, according to data from LPL Financial. Over the past 20 years, however, the month has been weak, with only September worse for stocks.
“June has something for everyone, as it is no doubt a very weak month historically, but the past decade it has been strong,” LPL Financial Chief Market Strategist Ryan Detrick said in a note. “Still, after the big bounce in late May, we wouldn’t be surprised at all if this recent strength continued into a potential summer rally.”
Bespoke Investment Group pointed out in a note Tuesday that summer months have historically seen weaker stock market returns relative to winter and early spring. According to data from the firm, the Dow Jones Industrial Average has averaged a gain of 0.47% in June over the last century, but has been a “coin flip” for positive returns during the month, logging gains only 52% of the time.
10:20 a.m. ET: Manufacturing activity remains resilient in May
Two readings on the U.S. manufacturing sector in May showed continued growth amid investor concerns of an impending economic slowdown.
The Institute for Supply Management’s Manufacturing PMI for May hit 56.1, up from 55.4 in April and marking the 24th straight month of growth. S&P Global’s U.S. Manufacturing PMI hit 57 in May, down from 59.2 in April.
For both reports, any reading over 50 indicates expansion in the sector while readings below 50 indicate contraction.
The data wasn’t all sunny, however, with the ISM’s employment index showing an unexpected decline last month. Additionally, S&P’s report showed business confidence falling to the lowest level since October 2020.
“A solid expansion of manufacturing output in May should help drive an increase in GDP during the second quarter, with production growth running well above the average seen over the past decade,” said Chris Williamson, chief business economist at S&P Global Market Intelligence. “However, the rate of growth has slowed as producers report ongoing issues with supply chain delays and labor shortages, as well as slower demand growth.”
Commenting on the ISM’s latest report, Tim Fiore, chair of the ISM’s Manufacturing Business Survey Committee, said, “The U.S. manufacturing sector remains in a demand-driven, supply chain-constrained environment. Despite the Employment Index contracting in May, companies improved their progress on addressing moderate-term labor shortages at all tiers of the supply chain.”
—Myles Udland, senior markets editor
10:07 a.m. ET: Job openings slide in April
The latest JOLTS — or Job Openings and Labor Turnover Survey — report showed 11.4 million jobs were open on the last business day of April, down from 11.86 million the prior month. Economists expected this report to show 11.35 million jobs were open at the end of April.
According to the BLS, the biggest decreases by industry were in health care and social work, retail, and food services, which all saw openings drop by more than 100,000 from March to April.
Job openings are being closely watched by economists for signs of potential cooling in the labor market, with Fed chair Jay Powell telling reporters last month the number of job openings relative to unemployed workers shows an “imbalance” in the labor market.
Wednesday’s data suggest a potential step towards re-balancing this market.
—Myles Udland, senior markets editor
9:33 a.m. ET: Wall Street kicks off June with gains after closing out volatile month
Here’s where the major indexes were trading at the start of Wednesday’s session:
S&P 500 (^GSPC): +24.02 (+0.58%) to 4,156.17
Dow (^DJI): +239.63 (+0.73%) to 33,229.75
Nasdaq (^IXIC): +93.71 (+0.78%) to 12,175.10
Crude (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 (^TNX): -0.2 bps to yield 2.8420%
7:22 a.m. ET: Futures struggle for direction as investors gear up for June trading
Here were the main moves in early trading Wednesday after Wall Street closed out a volatile 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
Crude (CL=F): +$1.38 (+1.20%) to $116.05
Gold (GC=F): -$14.70 (-0.80%) to $1,833.70 per ounce
10-year Treasury (^TNX): +10.1 bps to yield 2.8440%
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc