U.S. Stocks Edge Higher Amid Economic Uncertainty and Anticipation for Fed's September Decision

U.S. stocks rose modestly on Wednesday after a steep downward revision in payrolls and Federal Reserve minutes fueling expectations for a potential rate cut in September. Investors are awaiting the Jackson Hole Economic Symposium where Fed Chair Jerome Powell is set to speak. Target and TJX Cos stocks surged, while Macy's slumped.

U.S. stocks inched higher on Wednesday amid range-bound trading after investors parsed a steep downward revision in payrolls and the release of the minutes from the most recent Federal Reserve meeting, which cemented expectations for a September rate cut.

All three major U.S. stock indexes closed modestly higher. 'The seasonality of things, waiting for Jackson Hole, waiting to see whether there will be a Fed cut in September or not - it's causing bulls and bears to sit on the sidelines,' said Oliver Pursche, senior vice president at Wealthspire Advisors in New York. 'There's no compelling reason to do anything right now.'

The Fed released minutes from its most recent monetary policy meeting in July, where members elected to keep the key interest rate unchanged. Even so, the minutes indicate that Fed officials are already strongly leaning towards a rate cut in September. This sets the stage for the Jackson Hole Economic Symposium beginning Thursday, where Fed Chair Jerome Powell is scheduled to speak on Friday.

In economic news, the Labor Department's preliminary benchmark revision to payrolls data for the 12 months through March 2024 lowered the 2.9 million payroll adds originally reported by 818,000. It was the steepest preliminary downward revision since the global financial crisis, suggesting a more pronounced softening in the labor market.

'Prior to today's labor market data, the enthusiasm around Powell's speech (on Friday) was probably fairly muted,' Pursche stated. 'That changed today. This revision is putting Chairman Powell in a position where he's going to have to talk about the outlook for the labor market.'

Preliminary data showed the S&P 500 gained 22.54 points (0.40%) to end at 5,619.66, the Nasdaq Composite gained 101.27 points (0.57%) to 17,918.21, and the Dow Jones Industrial Average rose 58.99 points (0.14%) to 40,893.96. Target raised its 2024 profit forecast and posted its first quarterly increase in same-store sales in over a year, boosting the retailer's stock.

TJX Cos rose after lifting its annual profit forecast, while Macy's lowered its annual net sales forecast, sending shares of the department store chain sliding. U.S.-listed shares of Chinese e-commerce firm JD.com dropped after Walmart sold its stake in the firm. Ford Motor's stock advanced following an announcement shake-up in its electric vehicle plans.

(With inputs from agencies.)