Wall Street cheers promising US data and trade headlines

• The Nasdaq Composite ended higher by 1.8% to around 8,117.
• The S&P 500 climbed 1.3% to end near 2,976.
• The Nasdaq Composite ended higher by 1.8% to around 8,117.

U.S. stocks cheered the strong private labor market and services sector as well as the trade headlines which lead to  the Dow Jones Industrial Average, DJIA, +1.41% picked up 373 points, or 1.4%, to around 26,728.  The S&P 500 climbed 1.3% to end near 2,976. The Nasdaq Composite ended higher by 1.8% to around 8,117.  

US data

The US data was solid on Thursday, falling into the hands of the hawks. The 56.4 print for the non-manufacturing ISM was the highest reading in three months. “It is broadly in line with the average during the first half of this year when the economy grew by 2.5% saar. It shows solidity in the economy outside of manufacturing, despite tariffs and the global slowdown. Employment, however, fell to 53.1 vs 56.2, which might offset some of the labour market optimism following the strong ADP repot.  Overall it was a very good report in the current climate,” analysts at ANZ explained.  

“The August ADP report was quite a bit stronger than expected. Private payrolls rose 195k vs 142k in July (156k). The data supplemented the initial claims data for the NFP survey week and suggest a solid non-farm payrolls number tomorrow – the median expectation is 160k. The data imply the labour market, particularly service-producing jobs (+184k), is weathering the tariffs well. Without a downturn in private service sector jobs in the US, history shows that a recession is very unlikely,” the analysts at ANZ Bank elaborated.  

DJIA levels

The index got and held above the 26500s which guard a run towards the 26900s. On a continued recovery, bulls can run to 27200 in the near term with eyes on the mid-July highs of 27398s. On the flip side, the 200-DMA is located at 25630.