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ISM non-manufacturing PMI stronger than forecast

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US private payrolls rise less than expected in May, ADP

report

shows

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CrowdStrike ( CRWD ) gains after strong Q2 forecast

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HPE climbs after upbeat revenue forecasts

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Indexes: Dow down 0.27%, S&P up 0.24%, Nasdaq up 0.73%

(Updated at 10:05 a.m. ET/1405 GMT)

By Lisa Pauline Mattackal and Johann M Cherian

June 5 (Reuters) -

The S&P 500 and the Nasdaq edged up on Wednesday as

investors strengthened bets for an earlier-than-expected start

to the Federal Reserve's easing cycle after multiple reports

signaled a weakening labor market and slowing growth in the

world's largest economy.

Megacaps such as Nvidia ( NVDA ), Microsoft ( MSFT ) and

Amazon.com ( AMZN ) gained between 0.3% and 2.5%, while the

Philadelphia SE Semiconductor Index added 2.2%.

Tech stocks gained 1.1%, leading sectoral

advances. However, the majority of other S&P 500 sectors

declined.

U.S. Treasury yields initially slipped to two-month lows

after the ADP National Employment report showed private

employers increased their headcounts by 152,000 in April,

significantly lower than forecast.

Traders now expect nearly 48 basis points of easing this

year, according to the LSEG rate probabilities app. Expectations

for a September rate reduction are now at nearly 69%, versus

below 50% last week, according to the CME's FedWatch tool.

Separately, an Institute of Supply Management survey

showed

services sector activity

stood at 53.8 in May, better than the expectation of 50.8.

With major indexes near all-time highs, investors are

juggling worries of a weakening economy with hopes this would

lead to an earlier start to the Fed's rate cuts than previously

expected.

"The odds of recession have increased just from the data

that we've seen... the economy has tricked us and been more

resilient than people expect, but at some point it's going to

falter," said Thomas Martin, vice president and senior portfolio

manager at Globalt Investments.

However, "there's a lot of desire to participate and to

not miss out on a summer rally", he added.

Investors now await the nonfarm payrolls report, due on

Friday, for a comprehensive evaluation of the labor market.

At 10:05 a.m. ET, the Dow Jones Industrial Average

was down 103.18 points, or 0.27%, at 38,608.11, the S&P 500

was up 12.94 points, or 0.24%, at 5,304.28, and the

Nasdaq Composite was up 123.07 points, or 0.73%, at

16,980.11.

Losses in economically sensitive consumer discretionary

stocks were the biggest drags on the Dow.

Hewlett Packard Enterprise ( HPE ) topped the benchmark

index with a

13.8

% rise after forecasting third-quarter revenue

above Street expectations

, helped by upbeat demand for its AI servers.

Dollar Tree ( DLTR ) reversed earlier gains, slipping 2.2%

after a disappointing quarterly profit forecast. The budget

retailer said it would explore options that include a potential

sale or spin-off of Family Dollar.

Intel ( INTC ) gained 1.4% after buyout firm Apollo Global

Management ( APO ) agreed to purchase a 49% equity interest for

$11 billion, in a joint venture related to the chipmaker's

Ireland manufacturing unit.

CrowdStrike Holdings ( CRWD ) jumped 4.2% after forecasting

second-quarter revenue above estimates when markets closed on

Tuesday, helped by strong demand for its cybersecurity

offerings.

Advancing issues outnumbered decliners by a 1.15-to-1 ratio

on the NYSE, and by a 1.09-to-1 ratio on the Nasdaq.

The S&P index recorded

11

new 52-week highs and six new lows, while the Nasdaq

recorded

29

new highs and

57

new lows.