S&P 500 hits record high as trade optimism boosts techs

A man walks past an electronic stock board showing Japan's Nikkei 225 index at a securities firm in Tokyo Wednesday

Investors were reacting to a weaker-than-expected Automatic Data Processing Inc. private-sector labor report, which showed that the USA added 102,000 nonfarm jobs for June, less than economists were expecting, with growth being driven by the service-producing sector and hurt by small businesses.

The United States also agreed not to impose additional tariffs on the world's second-largest economy, and the detente is good news for markets.

The S&P 500 posted 85 new 52-week highs and no new lows; the Nasdaq Composite recorded 88 new highs and 40 new lows.

Traders are waiting to see what will come from the latest truce in the U.S.

The Dow Jones Industrial Average rose 45.64 points, or 0.17 per cent, at the open to 26,832.32. OPEC and its allies looked set to extend supply cuts until at least the end of 2019 at their meeting in Vienna this week.

The development relieved some pressure on the market, though the trade war still looms over global economic growth.

Technology stocks led the gains, helping the tech-heavy Nasdaq composite join the record-breaking club.

At 8:49 a.m. ET, Dow e-minis 1YMcv1 were up 57 points, or 0.21%. The sector has been broadly higher this week. Microsoft and Apple were also making gains. Merck rose 1.6% and Symantec soared 13.6% following a report that Broadcom was interested in buying it. Consumer staples, a market valued at $3.65 trillion, rose 1.4% as a whole. The slide in energy companies and losses in banks and other sectors outweighed gains in communications services, real estate and utilities stocks.

"With the overhang of further tariffs on Chinese imports paused and the chances of a rate cut from the Fed getting higher, more investors are getting comfortable to invest bigger in equities", said Shawn Gibson, chief investment officer at asset management firm Liquid Strategies.

Tesla jumped 6% after telling investors that it delivered more electric cars in the second quarter than any three-month period in its history.

Investors will be on the lookout for the government's closely watched monthly jobs report scheduled for Friday.

Trading was relatively quiet ahead of Wednesday's half day of trading for USA markets and Thursday's closure for Independence Day.

USA stocks have been on a tear since early June after Federal Reserve Chairman Jerome Powell put interest-rate cuts back on the table.

The yield on the 10-year Treasury note fell to 1.95% from 1.97% Tuesday.

The results of that report will likely be a factor in the Federal Reserve's meeting later this month. Shares fell back in Asia on Wednesday as the euphoria from President Donald Trump's truce with China's Xi Jinping on trade faded.