By Niket Nishant and Tharuniyaa Lakshmi
Sept 2 (Reuters) - The major U.S. stock indexes were set to end a three-day losing streak on Wednesday, as investors cautiously dipped back into equities despite renewed clashes in the Middle East.
The gains offer some respite at a time when geopolitical tensions have returned to the forefront, ending the uneasy calm of recent weeks.
Value-oriented corners of the market outperformed tech, with materials leading gains on the S&P 500 benchmark, with a 1.49% rise.
"One has to be adaptive. You need to be willing to reduce exposure at the right times, and have the capacity to reinvest very quickly," said Yung-Shin Kung, chief investment officer at Mast Investments.
Earnings from Dell also boosted sentiment toward AI stocks after the company raised its annual profit and revenue forecasts on robust demand for its AI-optimized servers.
Its shares rose 5.35%, while the S&P 500 tech sector gained 0.45%. Nvidia jumped 4.65%, outperforming the Magnificent Seven group of stocks.
At 12:00 p.m. ET, the Dow Jones Industrial Average rose 287.55 points, or 0.55%, to 53,056.06, the S&P 500 gained 44.35 points, or 0.58%, to 7,675.82 and the Nasdaq Composite gained 135.73 points, or 0.52%, to 26,235.50.
PRIVATE PAYROLLS GROWTH SLOWS
U.S. private payrolls increased less than expected in August, the ADP National Employment Report showed, ahead of what is expected to be a closely watched nonfarm payrolls print on Friday.
"The bigger picture likely will remain that the apparent upturn in employment growth in the spring already has faded," said Oliver Allen, senior U.S. economist at Pantheon Macroeconomics.
Traders were also watching yields on U.S. Treasuries. The 10-year Treasury yield was marginally higher and was close to levels not seen since January 2025.
Elevated yields on risk-free U.S. Treasuries reduce the appeal of taking on the added risk of buying stocks.
"Investors are very concerned about the upward trend in global bond yields and as a result, are lightening their exposure to equities where they have substantial profits," said Sam Stovall, chief investment strategist at CFRA Research.
Any flare-up in the Middle East could complicate the interest-rate outlook further. Over the past week, traders have sharply increased bets on a September rate hike after Federal Reserve Chair Kevin Warsh said taming price pressures is the central bank's chief focus.
Markets are now pricing in a 64% chance of a hike in September, according to the CME FedWatch tool, compared with about 37% a week ago.
Investors are contending with seasonal weakness too. Since 1926, the benchmark S&P 500 has lost 0.7% on average in September, making it the weakest month for stocks and the only one with a negative average return, according to Fisher Investments, which cited data from Finaeon.
Separately, Brown-Forman rose 4.2% after the Jack Daniel's maker beat first-quarter profit estimates.
Uber Technologies rose 1.48%, as the company said it will lay off about 10% of its staff.
Advancing issues outnumbered decliners by a 1.89-to-1 ratio on the NYSE and by a 1.61-to-1 ratio on the Nasdaq.
The S&P 500 posted nine new 52-week highs and nine new lows, while the Nasdaq Composite recorded 38 new highs and 107 new lows.
(Reporting by Niket Nishant and Tharuniyaa Lakshmi in Bengaluru; Editing by Maju Samuel)
