US stocks closed with mild losses on Wednesday as solid economic data and comments from Federal Reserve Chair Kevin Warsh contributed to uncertainty surrounding future interest rate decisions. While markets are pricing in a 29.4% chance of a US interest rate hike this month, down from 34.2% a week prior, investors remain troubled by the prospect of a rate hike later in the year. Fed Chair Warsh declined to offer explicit guidance on future monetary policy but acknowledged that inflationary risks have eased recently, sticking to the central bank's 2% inflation target.
Economically, US employers announced 45,849 job cuts in June, the lowest monthly total since December 2025. However, US private sector employment growth in June was less than expected, with a rise of 98,000, missing economists' expectations of 120,000. US factory activity grew for the sixth consecutive month, with the ISM manufacturing PMI at 53.3, and construction spending edged up 0.1% to an annualized $2.21 trillion in May. These positive economic signals led to gains in cyclical stocks like financials, real estate, and consumer discretionary, with banks such as JPMorgan Chase, Bank of America, Wells Fargo, and Goldman Sachs performing well.
The Dow Jones Industrial Average pulled back just 0.03% to 52,305.24, the S&P 500 fell 0.22% to 7,483.23, and the Nasdaq Composite slipped 0.66% to 26,040.03. Chipmakers were a significant drag, with Micron Technology dropping 10.6% and Sandisk also declining, as the sector cooled after recent gains. In contrast, Meta Platforms surged nearly 9% to $612.91 after reports of its plan to launch a new cloud business selling excess computing power, limiting the decline in the broader tech indexes. Nike jumped 4.9% after beating earnings forecasts, though it warned of an uneven turnaround due to weakness in China. General Mills also climbed 8.5% after strong fourth-quarter sales and a plan to cut $3 billion in costs by fiscal 2030.
