US stocks close higher as data keeps Fed rate cut hopes elevated

STORY: Wall Street's main indexes closed higher on Wednesday, with the Dow adding almost nine-tenths of a percent, the S&P 500 gaining three-tenths of a percent and the Nasdaq ticking up marginally.The ADP National Employment Report showed U.S. private payrolls unexpectedly declined in November, helping to keep expectations elevated for an interest rate cut by the Federal Reserve next week.But Dean Smith, chief strategist and portfolio manager at FolioBeyond, believes a rate cut would be a step backwards in the battle against rising prices."I think there's a pretty broad consensus that conditions in the labor market are softening. The Federal Reserve has turned their attention to that. Personally, I think that's a mistake. I think inflation should continue to be their focus. We're still running around 3%, which is 50% higher than their stated 2% target. And they're probably going to cut anyway. I think with the benefit of hindsight, we're going to look back and say they should have stood pat."Stocks on the move Wednesday included Microsoft, which shed 2.5% after a CNBC report said the tech giant has cut AI software sales quotas after many salespeople at the company missed their targets. Microsoft denied the report.Shares of Marvell Technology jumped almost 8% after the chipmaker said it will buy semiconductor startup Celestial AI in a deal worth $3.25 billion.And shares of American Eagle Outfitters surged 15% after the retailer raised its annual comparable sales forecast, betting on strong demand during the holiday season.