Markets hesitate while traders wait for Powell's report later today

Dow went up 102, advancers over decliners 5-4 & NAZ slid back 13.  The MLP index was off 2+ to the 276s & the REIT index added 1+ to the 356s.  Junk bond funds crawled higher & Treasuries had limited buying which reduced yields (more below).  Oil was off 1+ to 80 & gold gained 8 to 2311.

AMJ (Alerian MLP Index tracking fund)

Hiring by US companies rose more than expected in Apr as the labor market remained resilient even in the face of higher interest rates & ongoing inflation, according to the ADP National Employment Report.  Companies added 192K jobs last month, beating the 175K increase predicted but down from the upwardly revised Mar gain of 208K.  At the same time, the report showed that wage growth, a key driver of inflation, decelerated last month, with annual pay rising 5%.  For workers who changed jobs, wages climbed 9.3%, a steep drop from the 10.1% boost recorded in Mar.  Job growth was widespread across sectors last month.  The leisure & hospitality sector accounted for the most job gains in Apr with the industry onboarding 56K new workers.  There were also substantial hiring gains in construction (35K), education & health services (26K), trade, transportation & utilities (26K) & professional & business services (22K).  Hiring fell in just one sector: information, which shed 4K positions in Apr.  The stronger-than-expected report comes in the wake of an aggressive tightening campaign by the Federal Reserve, which has raised interest rates to the highest level since 2001.  Traders are watching the labor market closely for signs that it is finally cooling, so the Fed can pivot to cutting interest rates.

Private sector job growth rises more than expected in April

Microsoft (MSFT), a Dow stock, signed a deal with Brookfield Asset Management to invest more than $10B to develop renewable energy capacity to power the growing demand for artificial intelligence & data centers, the companies announced.  Brookfield will deliver 10.5 gigawatts of renewable energy for MSFT during 2026 - 2030 in the US & Europe under the agreement.  The companies described the deal as the largest single electricity purchase agreement signed between 2 corp partners.  The 10.5 gigawatts of renewable capacity is 3 times larger than the 3.5 gigawatts of electricity consumed by data centers in Northern Virginia, the largest data center market market in the world.  A Brookfield spokesperson said the deal would lead to more than $10B of investment in renewable energy.  The scope of the deal could increase to include additional energy capacity in the US & Europe, as well as Asia, Latin America & India.  The agreement will focus on wind, solar & new carbon-free technologies.  MSFT has pledged to have 100% of its electricity matched by zero-carbon energy purchases by 2030.  MSFT stock rose 5.09.

Microsoft to invest more than $10 billion on renewable energy capacity for data centers

Treasury yields fell, as investors awaited economic data & the Federal Reserve's latest interest rate decision & monetary policy guidance.  The yield on the 10-year Treasury was 3 basis points lower at 4.657% & the 2-year Treasury yield was last at 5.01% after dipping by nearly 4 basis points, holding above the 5% mark it crossed yesterday.  Yields & prices move in opposite directions & 1 basis point equals to 0.01%.  The latest ADP private payrolls report showed 192K workers added in Apr.  Investors also looked ahead to the conclusion of the Federal Reserve’s latest meeting & considered key economic data.  The Fed is widely expected to keep rates unchanged, & investors are hoping that officials will provide fresh signals about the potential path ahead for interest rates.  Uncertainty has grown in recent weeks about the possibility, number & timing of interest rate cuts this year.  Economic data has suggested resilience from the economy & sticky inflation, while Fed officials have said there is no rush to cut rates & reiterated that they would do so only once they are convinced that the economy is easing sustainably.  According to CME Group's FedWatch tool, traders were last pricing in a 45% chance of a Sep rate cut.

Treasury yields dip ahead of Fed decision, policy guidance

Dow opened about even & that was followed by a little buying of stocks.  Everybody is waiting for Powell's comments.  Also, the latest earnings reports have been coming in underwhelming.

Dow Jones Industrials