U.S. stocks turned mixed on Wednesday after recovering from earlier losses in volatile trading.
Investors assessed fresh U.S. labor market data, manufacturing indicators and comments from Federal Reserve Chair Kevin Warsh. Markets also monitored developments in the U.S.-Iran peace negotiations.
The moves followed a strong finish to the second quarter and the first half of the year.
Dow and S&P 500 Edge Higher
At 11:15 ET, the S&P 500 had moved into positive territory. The benchmark index gained 0.1% to 7,510.17 points.
The Dow Jones Industrial Average also reversed earlier losses. It rose 0.2% to 52,427.08 points.
Meanwhile, the technology-heavy Nasdaq Composite slipped 0.2% to 26,173.59 points.
Wall Street Ends Strong Second Quarter
The major U.S. stock indexes advanced on Tuesday, completing a strong but volatile second quarter.
A recovery in technology stocks supported market sentiment. Semiconductor shares recorded another notable gain after rebounding from weakness during the previous week.
The S&P 500 climbed nearly 15% during the June quarter. The Nasdaq surged 21.4%, while the Dow gained 12.9%.
Artificial Intelligence Stocks Drive Market Gains
Technology companies exposed to artificial intelligence were among the main drivers of the quarterly rally.
Investors continued to assess whether companies would maintain their aggressive spending on AI chips, data centers and computing infrastructure.
However, concerns about the sustainability of these investments pressured sentiment near the end of June.
Vital Knowledge analysts said the technology sector was increasingly dividing into three groups.
These include infrastructure suppliers benefiting from the data center boom, hyperscalers funding the expansion and traditional software companies facing disruption from artificial intelligence.
Warsh Avoids Giving Interest-Rate Guidance
Federal Reserve Chair Kevin Warsh remained a major focus during the session.
Warsh participated in a European Central Bank panel in Sintra, Portugal. Investors closely followed his comments for clues about future interest-rate decisions.
The Fed chair has suggested that the central bank could reduce or eliminate forward guidance.
This would mark a significant change from the approach used by his predecessor, Jerome Powell.
Federal Reserve Reviews Its Policy Communication
After leading his first interest-rate meeting earlier this month, Warsh announced plans to review the Federal Reserve’s operations.
The review will examine how the central bank communicates, evaluates economic conditions and makes monetary policy decisions.
On Wednesday, Warsh again refused to outline a future rate path.
He said members of the Federal Open Market Committee were preparing for a “good family fight” at their July meeting.
Warsh Says Inflation Risks Have Declined
Warsh also said inflation risks had eased.
Energy-driven inflation has remained an important concern since the Iran war began in late February.
However, oil prices have returned toward pre-war levels following an interim peace agreement between the United States and Iran.
Lower energy prices could reduce the risk of a broader inflation surge.
Jobs Report Could Move Global Markets
FXTM Head of Markets Lukman Otunuga said investors were focused on the central bank discussions in Sintra and the upcoming U.S. employment report.
Any change in Federal Reserve expectations could create significant moves across equities, currencies and commodities.
Markets are particularly sensitive to signs that could influence the timing of the Fed’s next rate increase.
U.S.-Iran Negotiations Remain in Focus
Investors also monitored talks involving U.S. and Iranian officials in Qatar.
Both delegations were expected to hold separate discussions with mediators from Qatar and Pakistan.
The talks aim to build on the existing framework agreement and bring a lasting end to the conflict.
However, tensions have risen again following skirmishes around the Strait of Hormuz.
Strait of Hormuz Dispute Continues
Washington and Tehran remain divided over the future control of the Strait of Hormuz.
The White House has said the strategic waterway is open to shipping. Iran, however, wants to retain some authority over maritime traffic.
Iran’s earlier closure of the strait pushed oil prices above $110 per barrel.
That surge increased concerns about inflation, global trade and weaker economic growth.
Brent crude was trading near $72 per barrel on Wednesday.
Trump Gives Positive Update on Iran Talks
President Donald Trump said the denuclearization of Iran was progressing well.
He also described recent meetings as positive and said relations between the two countries were improving.
However, the lack of direct negotiations and continued disagreement over the Strait of Hormuz suggest that major issues remain unresolved.
ADP Private Payrolls Miss Expectations
The economic calendar included ADP’s latest private-sector employment report.
U.S. private employers added 98,000 jobs in June. That was below the expected increase of 118,000 and weaker than May’s gain of 122,000.
ADP Chief Economist Nela Richardson said the figures reflected both weaker labor demand and worker shortages in certain sectors.
She added that the overall result was a slowdown in job creation.
Manufacturing Data Also Draws Attention
Investors also awaited the Institute for Supply Management’s manufacturing report.
Economists expected the manufacturing purchasing managers’ index to slip to 53.8 in June from 54.0 in May.
A reading above 50 generally indicates that the manufacturing sector is expanding.
May’s reading was the strongest since 2022. The increase was partly linked to companies placing orders early to avoid higher fuel costs and supply shortages.
A separate measure of prices paid by manufacturers was also expected to decline as energy expenses cooled.
Nike Shares Reverse Early Losses
Nike shares initially fell nearly 1% after the company warned that its turnaround could take longer than expected.
The stock later recovered and gained 3.4%.
Nike continues to struggle with weaker sales in China, one of its most important international markets.
Although fiscal fourth-quarter revenue exceeded expectations, a double-digit decline in Chinese sales weighed on the company’s performance.
CEO Elliott Hill said Nike had not yet achieved the results it wanted and was still operating below its full potential.
Investors Search for Fresh Market Direction
Wall Street remains supported by strong technology gains and enthusiasm surrounding artificial intelligence.
However, weaker hiring, uncertainty over Federal Reserve policy and geopolitical risks could increase volatility.
Investors will now focus on upcoming employment data, manufacturing figures and further developments in the U.S.-Iran negotiations.
