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Jobs data points to easing labor market

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ISM services PMI weaker than expected

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Paramount jumps on report of Skydance Media deal

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First Foundation ( FFWM ) slumps after capital raise

(Updates with closer at 1 pm ET/1700 hrs GMT)

By Ankika Biswas, Lisa Pauline Mattackal and Saeed Azhar

July 3 (Reuters) -

The S&P 500 index and technology-laden Nasdaq rose on

Wednesday to post record high closes, as data pointing to a

softening economy raised hopes the Federal Reserve could cut

interest rates in September.

The Dow Jones Industrial Average closed little changed

after spending most of the session lower, pressured by selling

in healthcare and consumer stocks during a shortened trading

session ahead of the Fourth of July. The market will stay closed

on Thursday for U.S. Independence Day, keeping trading volumes

thin throughout the week.

Both the ADP Employment report and weekly jobless claims

data pointed to easing labor market conditions ahead of Friday's

closely watched non-farm payrolls report. Markets hope signs of

weakness in the labor market will encourage the Fed to cut

interest rates.

"It's quite a strong unemployment claims number, and

it's fitting in with an overall trend that's probably an

indication of loosening up in the jobs market. It must be quite

welcoming for the Fed," said David Morrison, Trade Nation senior

market analyst.

Also,

PMI data

from the Institute for Supply Management was weaker than

expected, and factory orders unexpectedly slumped. Investors

boosted bets of a September rate cut to over 70%, as per LSEG's

FedWatch.

The Fed's June meeting minutes are due after the market

closes.

Tesla jumped, trading near a six-month high after

rising more than 10% on Tuesday following a

smaller-than-expected drop in second-quarter vehicle deliveries.

The Philadelphia SE Semiconductor Index rose, helped

by gains in the U.S. listing of Taiwan Semiconductor

Manufacturing ( TSM ) and Broadcom ( AVGO ).

Nvidia ( NVDA ) closed higher, after slipping on

Tuesday, while other mega-stocks were weaker such as Amazon ( AMZN )

.

"The tendency at the moment is towards rotation ... we

have quite a few days where we see the Russell down, and tech up

and vice versa," Morrison said, though noting that the market's

optimism around megacap tech stocks was still strong.

The S&P 500 has jumped over 15% in the first half of

2024, largely supported by top-tier high momentum

technology-related stocks. The benchmark index's equal-weighted

counterpart only rose 5% and small and mid-cap stocks

have significantly lagged.

According to preliminary data, the S&P 500 gained

27.82 points, or 0.50%, to end at 5,536.83 points, while the

Nasdaq Composite gained 159.54 points, or 0.88%, to

18,188.30. The Dow Jones Industrial Average fell 26.41

points, or 0.07%, to 39,305.44.

Paramount Global ( PARAA ) extended gains after Shari

Redstone's National Amusements reached a preliminary deal to

sell its controlling interest in the media giant to David

Ellison's Skydance Media.

First Foundation ( FFWM ) slumped after the lender, which

holds a huge portfolio of multifamily real estate loans,

disclosed a $228 million unexpected capital raise.