12:10 PM EDT, 07/03/2024 (MT Newswires) -- US equity indexes traded mixed as government bond yields sank after a services gauge surprisingly fell into contraction territory and bets for a September interest-rate cut increased following Federal Reserve Chair Jerome Powell's comments Tuesday.

The Nasdaq rose 0.4% to 18,102.1, and the S&P 500 climbed 0.2% to 5,521.2 around midday on Wednesday. However, the Dow Jones Industrial Average fell 0.1% to 39,274.3. Technology, utilities, and industrials were the top gainers intraday. Healthcare led the decliners. The US equity and bond markets will close early at 1 pm ET and remain closed on Thursday.

The US 10-year Treasury yield slumped 8.1 basis points to 4.35%, with the two-, five-, and 30-year rates also trading sharply lower.

In economic news, the Institute for Supply Management's US services index declined to 48.8 in June from 53.8 in May, compared with expectations for 52.6 in a survey compiled by Bloomberg. The index indicates contraction, which is in line with the readings from Richmond and Dallas Fed banks but in contrast to other regional services data that suggest that the sector expanded.

ADP's monthly measure of private payrolls showed a 150,000 increase in June, below expectations compiled by Bloomberg for 165,000. The June gain followed an upwardly revised 157,000 in May.

The probability that the Federal Open Market Committee will cut interest rates by 25 basis points in September jumped to 67% as of Wednesday afternoon from 63% the previous day.

On Tuesday, Powell reportedly said the FOMC has made "quite a bit of progress" in bringing inflation back to its target of 2%, still, policymakers need to see more encouraging data before lowering interest rates. "The last (inflation) reading and the one before it to a lesser extent, suggest that we are getting back on the disinflationary path."

West Texas Intermediate crude oil climbed 0.2% to $82.94 a barrel.

In company news, BofA Securities raised its price target on Tesla (TSLA) to $260 from $220 while maintaining its buy rating. Tesla reported stronger-than-expected second-quarter deliveries on Tuesday. Shares of the electric automaker jumped 5.5% intraday, among the top gainers on the S&P 500 and the Nasdaq.