Dow Jones: Yields Ease After ADP Miss, but Can the US 30 Hold Its Bounce?

Stocks Held in Place as ADP Missed and Oil Held the Other Side

U.S. stocks are higher Wednesday after Tuesday’s global bond selloff but the gains are not convincing. The ADP employment report missed expectations and did not move the needle. Oil stayed above $90 WTI. The 10-year Treasury yield pulled back from 4.814% but stayed near a 20-month high. Friday’s nonfarm payrolls report decides whether the rate trade keeps running or gives buyers room to work with.

Daily Dow Jones (DJI) Industrial Average Technical Analysis

The Dow Jones Industrial Averageis edging higher shortly after the opening on Wednesday after finding support near the 50-day moving average at 52,877.17 the previous session.

The main trend turned down on Tuesday when sellers took out the previous swing bottom at 52,754.90. However, there was no follow-through to the downside today, and yesterday’s low at 52,691.31 remains intact.

Near-term support is a retracement zone at 53,143.20 to 52,765.33. Traders are deciding whether to overtake the upper level, but there may not be enough room to the upside with resistance dropping in at 53,255.48. If buyers can overcome this resistance, then there is the possibility of a surge into another retracement zone at 53,717.82 to 53,960.08 and a main top at 53,819.65 inside this zone.

The formation of the secondary lower top at 53,819.65 and the change in trend to down suggest weakness, which could create a sell-the-rally scenario. If selling pressure returns today, then keep an eye on the 50-day moving average because it could determine the direction into the close.

The 10-Year Hit 4.814% and the ADP Miss Did Not Walk It Back

The U.S. 10-year reached 4.814% Wednesday morning, the highest since November 2023. It eased to near 4.8% later in the session. The 30-year held above 5.2%. The 2-year stayed near 4.4%.

Japan’s 10-year hit 3% for the first time in three decades. U.K. gilt yields reached levels last seen around the financial crisis. German yields pushed to 15-year highs. The bond selloff is running across four countries at the same time and the ADP miss at 38,000 versus 47,000 did not slow it down. Traders saw the weaker labor print. They also saw WTI above $90, Brent near $95 and a Strait of Hormuz that is still disrupted. Wednesday’s session sat between those two reads and could not break either way.

Oil Kept the Inflation Side From Giving Ground

Crude gave back some of Tuesday’s gains but WTI stayed above $90 and Brent stayed near $95. The United States and Iran have exchanged their largest round of fire since July. Tankers hit mines in the Strait Wednesday.

The ADP number landed soft. Crude did not care. Fed funds futures still show roughly 68% to 70% odds of a September rate increase. The ADP number did not crack that.

Technology Held Together but Nobody Is Chasing It

The Nasdaq took the biggest hit Tuesday when yields rose across multiple countries. Wednesday the group held. There was no technology liquidation. There was no technology rally either.

AI spending has not disappeared. The same chip and cloud names that carried the Nasdaq through August are still spending. Williams cited AI infrastructure as a driver of higher long-term yields Wednesday. The spending is real. The price the market is willing to pay for it with the 10-year near 4.8% is the question nobody answered Wednesday.

The Dow bounced off its 50-day moving average Tuesday and edged higher Wednesday. The Nasdaq sat. The chip names that led August are not leading this week. The growth side of the market took the first hit when global yields moved together and it has not recovered the ground. Wednesday was a hold, not a recovery.

What to Watch

Friday’s payrolls report is the event running the stock market now. Economists expect 56,000 jobs added in August. The ADP number at 38,000 says the labor market is cooling. Three Fed officials say inflation is still too high. Oil above $90 WTI says the same thing. The 10-year just made a 20-month high. One side of that argument breaks Friday. The indices are stuck until it does.

The Dow is testing support, not regaining control. The main trend turned down Tuesday after taking out 52,754.90. Wednesday’s low at 52,691.31 held but there was no follow-through from buyers. The 50-day moving average at 52,877.17 is the level controlling the near-term direction. A sustained move over 53,255.48 weakens the bearish read. Renewed selling keeps the 50-day in play and the secondary lower top at 53,819.65 confirms sell-the-rally mode until the data changes the setup.

More Information in our Economic Calendar.