LIVE MARKETS-US stocks shake off data, tech weakness, take solace in rate cut hopes

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US STOCKS SHAKE OFF DATA, TECH WEAKNESS, TAKE SOLACE IN RATE CUT HOPES

U.S. stocks advanced on Wednesday, as a flurry of economic data kept expectations elevated for an interest rate cut by the Federal Reserve next week, while a fall in Microsoft's shares held gains in check.

The ADP National Employment Report showed U.S. private payrolls unexpectedly fell in November.

In another data release, the Institute for Supply Management said U.S. services activity was little changed in November at 52.6 versus 52.4 in October while the prices paid component dipped but remained elevated. The reading comes ahead of the delayed personal consumption expenditures report, the Fed's preferred inflation gauge, on Friday.

According to the CME's FedWatch Tool, the probability that the FOMC delivers a 25-basis-point rate cut at its December 9-10 meeting is now 89%. This is up sharply from one month ago when it stood at about 67%.

Most S&P 500 .SPX sectors rose with a slight bias for value .IVX over growth .IGX.

Energy .SPNY and financials .SPSY, both up more than 1%, posted the biggest gains.

Only utilities .SPLRCU and tech .SPLRCT declined.

Tech was dragged lower by shares of Microsoft MSFT.O which fell as much as 3% after a report said the tech giant has cut AI software sales quotas after many sales staff missed their targets in the fiscal year that ended in June. The stock did cut initial losses and ended down 2.5% after CNBC said Microsoft denied the report. This helped pull the S&P 500 and Nasdaq into positive territory.

Among groups that outperformed on the day were big banks .SPXBK, transports .DJT, small-caps .RUT, regional banks .KRX, and chip stocks .SOX.

In fact, the SPXBK notched a record close.

Meanwhile, with the S&P 500's overall strength on the day, uncertainty waned. The CBOE Volatility Index .VIX scored its lowest close since October 27.

Here is a snapshot of where markets stood just shortly after 4 p.m. ET:

(Terence Gabriel)

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