Gathering Momentum. The closer we get to the next Federal Reserve meeting, the more confident investors seem to be about another rate cut—and the higher stocks go.

The S&P 500 finished the day up 0.3%, putting it within 0.6% of a record high.

The Dow Jones Industrial Average added 408 points or 0.9%. The tech-heavy Nasdaq Composite rose 0.2%. Small-cap stocks were a standout, with the Russell 2000 up 1.9%.

But perhaps more important than any of the major sectors: the Dow Jones Transportation Average jumped 2% on the day.

Better known as the Dow Transports and made up of 20 transportation stocks—including UPS, FedEx, J.B. Hunt, Delta Air Lines, and Uber Technologies—the index is up eight consecutive trading days, its longest winning streak since October 2021. The index is made up of companies that move goods and people across the country and is seen as a leading indicator of economic trends. My colleague Karishma Vanjani adds:

People pay attention to this ‘other Dow’ because of the so-called Dow Theory, which says that the 30 Dow Jones Industrial Average components must move in tandem with the Transports for a true bull market to take hold.

Meanwhile, gold prices extended their gains after ADP reported weaker U.S. private payrolls data for November, reinforcing expectations that Fed officials will lower interest rates next week.

Support for a Fed Cut Continues to Mount

Although next week’s interest rate decision from the Federal Reserve will be close a call among increasingly divided policymakers, the latest measure of private sector job growth released Wednesday helps tip the scales toward a cut.

The U.S. shed 32,000 jobs from private payrolls last month, according to the ADP National Employment Report released Wednesday morning. The November job losses upended economists expectations for a modest gain and are a significant reversal from October, which saw employers gain a revised 47,000 jobs.

The ADP figures, which aren’t always a good barometer of official nonfarm payroll data, have taken on an outsize importance in recent months after the government shutdown prevented the Bureau of Labor Statistics from collecting, processing, and releasing economic data. Wednesday’s ADP measure is among the limited employment data policymakers will have ahead of the Federal Open Market Committee meeting next week. The BLS won’t release October and November employment information until Dec. 16.

“The modest fall in the ADP payrolls measure in November, coming on the back of a similar message from the Fed’s Beige Book, should be enough to persuade the FOMC to vote for another cut next week,” writes Stephen Brown, deputy chief North America economist at Capital Economics.

Odds of a rate cut at the December meeting were at roughly 89% after the ADP report, according to the CME FedWatch tool.

November’s private sector slowdown was led by a significant pullback among small businesses at a time when employers typically retain workers heading into the holidays. Businesses with fewer than 50 employees saw the biggest losses, shedding more than 120,000 jobs in November. Medium and large employers experienced a net increase in hiring.

“When you look historically, the labor market is not weak—but it is weakening, and the first to crack is small establishments. So I see them as a canary in the coal mine,” says Nela Richardson, ADP’s chief economist.

The Calendar

Dollar General, Ulta Beauty, SentinelOne, Kroger, Brown Forman, Docusign, and Toronto-Dominion Bank report earnings tomorrow.

What We’re Reading Today

• Nasdaq Lists Some Tiny IPOs That Go Up in Flames. Regulators Are Cracking Down.

• Bitcoin Rebounds. Have Cryptos Reached a Turning Point?

• Home Prices Will Inch Up. Where You’ll Pay Less.

• Gambling Addiction Is a Growing Problem. How to Protect Family Assets.

• Trump White House Outlines Proposal That Could Narrow Pipeline for Future Fed Leaders

What’s Ahead for Markets in 2026? Join Barron’s virtual roundtable on Dec. 11.

From “Liberation Day” tariffs to torrid rallies in AI stocks and gold, this year has been full of surprises. Join us for discussions with investment strategists and money managers about the outlook for the economy and markets in 2026—and how to position your portfolio for success.