Wednesday, the three major U.S. stock indices rose together, with rising interest rate cut expectations causing one stock to fluctuate unpredictably.

Weak Employment Data Sparks Rate Cut Bets, Fed December Decision Becomes Focus

The US stock market generally rose on Wednesday (December 3rd), driven by a rapid cooling in the employment market. The latest ADP private sector employment report issued a warning—US private sector employment unexpectedly shrank by 32,000 in November, contrasting sharply with economists’ forecast of a 40,000 increase. This significant decline in a leading indicator instantly ignited market expectations for the Federal Reserve to adopt a more dovish stance next week.

According to CME FedWatch data, investors have pushed the probability of the Fed cutting interest rates by 25 basis points at the December 10th meeting to 89%, well above mid-November levels. This shift in expectations directly boosted market sentiment.

At the close, the Dow Jones Industrial Average rose 408.44 points (0.86%) to 47,882.90; the S&P 500 increased 0.30% to 6,849.72; the Nasdaq rose 0.17% to 23,454.09.

Certuity Chief Investment Officer Scott Welch told CNBC: “The market’s focus has shifted to the labor market. Weak data will directly compel the Fed to act, and a rate cut next week is almost a certainty.”

Additionally, the market is closely watching a political development—reports indicate the Trump administration has canceled interviews with candidates for Fed Chair. Investors speculate that the likelihood of White House economic advisor Kevin Hasset, who favors aggressive rate cuts, replacing current Chair Jerome Powell is rising, possibly by May next year. This expectation has also boosted market optimism.

Service Sector Resilience Remains, ISM Data Beats Expectations

Another released data point provides a balanced perspective. The US ISM Services Index registered at 52.6, exceeding market expectations of 52.1, continuing a moderate expansion pace. Although the “Prices Paid Index” declined, it remains at a relatively high level, indicating that inflationary pressures in the service sector have not shown clear signs of easing.

This data supports the view that the economy has not fallen into a sharp recession, explaining why most industries still demonstrate resilience. Investors are also awaiting the release of the Personal Consumption Expenditures (PCE) Price Index on Friday—Fed’s preferred inflation measure.

Microsoft’s Stock Fluctuations Shake Tech Sector, AI Industry Chain Under Pressure

The tech sector performed weakly, mainly due to Microsoft’s turbulence. Microsoft’s stock price temporarily fell over 3% during trading after reports from The Information claimed the company had cut AI software sales quotas due to a large number of sales staff not meeting last fiscal year’s targets.

Subsequently, CNBC reported that Microsoft denied the news, and the stock rebounded from its intraday low, helping the Nasdaq and S&P 500 turn back to gains. Nevertheless, the tech sector ultimately closed lower, becoming one of only two declining sectors in the S&P 500; the energy sector performed best due to rising oil prices.

Influenced by Microsoft’s volatility, several heavyweight stocks in the AI industry chain also came under pressure: Nvidia slightly retreated, Broadcom fell over 1%, and Micron Technology declined more than 2%.

Welch noted: “The AI industry is entering a differentiation phase, and the market is re-evaluating whether large-scale capital investments can match profit growth.” He added that tech giants are rapidly borrowing to expand data centers, which could lead to valuation pressures in the future.

The Other Side of the Market: Bitcoin Rebounds Impressively, Concept Stocks Strengthen

Despite pressure on tech giants, other sectors are shining:

Bitcoin continued its rebound, returning above $92,000 (real-time quotes show it has adjusted to the $87.70K range). This is a strong recovery after last week’s “biggest single-day drop since March,” with improved risk sentiment driving Bitcoin-related concept stocks to stabilize.

Data center concept stock Marvell Technology surged over 7% after disclosing strong data center growth prospects, becoming the brightest spot in the tech sector.

Retail stocks performed well, with American Eagle Outfitters soaring 14% after raising full-year guidance and stating that “the holiday shopping season has started strongly.”

Banking and consumer finance stocks also generally strengthened, with Wells Fargo and American Express seeing capital inflows, benefiting from investor expectations of falling interest rates and easing financing conditions.