01:00 PM EDT, 06/04/2025 (MT Newswires) -- US equity indexes edged up after midday trading Wednesday as the probability of interest-rate cuts later this year increased after a contractionary services index print sent government bond yields sharply lower.

The Nasdaq Composite rose 0.1% to 19,418.5, the S&P 500 climbed 0.1% to 5,973.7, and the Dow Jones Industrial Average advanced less than 0.1% to 42,526.1. Communication services and healthcare led the gainers intraday, while energy and utilities were among the steepest decliners.

The Institute for Supply Management's US services index fell to 49.9 in May from 51.6 in April, compared with expectations of an increase to 52 in a Bloomberg-compiled survey. The print marks the first sub-50 reading since June 2024 and only the 4th in the 60 months since June 2020, a Jefferies note said.

"The details of the report show more signs of a pause in activity rather than a steep contraction," Jefferies Chief US Economist Thomas Simons said in the note. "A broad pause is not a good thing, and the uncertainty that precipitated this pause has not shown any signs of lifting."

Investors still await confirmation of a call between President Donald Trump and his Chinese counterpart, Xi Jinping, to energize bilateral trade tariff negotiations. "I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!" Trump posted on Truth Social on Wednesday.

Further, in economic news, the ADP Institute's employment report showed a 37,000 rise in private payrolls for May following a 60,000 increase in the preceding month, compared with estimates compiled by Bloomberg for a 114,000 gain.

The US labor market is weakening, Thierry Wizman, a global foreign exchange and rates strategist at Macquarie, said in a note. "Combined with the recent decline in US inflation, we think that the Fed will lean toward a more 'dovish' message on June 17 than it did on May 7, and the prospect for a rate cut in 2025 has strengthened a bit."

The CME's FedWatch tool shows a 56% probability as of Wednesday afternoon that the Fed will cut the target range for its federal funds rate to 4% to 4.25% in September from the current 4.25% to 4.50%, ending its policy pause. That likelihood stood at 28% a month ago and 48% a week ago.

US Treasury yields fell, with the 10-year slumping 10.5 basis points to 4.36% and the two-year rate dropping 9.1 basis points to 3.87%.

The ICE US Dollar Index, which measures the greenback's performance against the world's major currencies, declined 0.5% to 98.76. That helped push gold futures higher 0.7% to $3,399.11 per ounce.

West Texas Intermediate crude oil futures dropped 1.1% to $62.75 a barrel.

In company news, Dollar Tree (DLTR) forecast an earnings decline of up to 50% for the current quarter amid the impact of tariffs, taking the shine off better-than-expected fiscal Q1 results. Shares sank 7% intraday, the worst return on the S&P 500.

CrowdStrike Holdings (CRWD) shares dropped 6.3% intraday, among the steepest decliners on the S&P 500 and the Nasdaq, after the company reported a decline in fiscal Q1 non-GAAP earnings.