The S&P 500 rose to new highs in Wednesday's shortened trading session as investors appeared to shrug off sluggish economic data.

The broad market index added 0.51%, closing at 5,537.02. The Nasdaq Composite rose 0.88%, ending the session at 18,188.30, as megacap technology names such as Tesla and Nvidia rallied. Both indexes touched fresh all-time highs in the session and closed at records.

The Dow Jones Industrial Average lost 23.85 points, or 0.06%, to end at 39,308.00. The 30-stock index was weighed down by a nearly 1.7% drop in UnitedHealth.

Trading volume was muted Wednesday with the New York Stock Exchange closing early at 1 p.m. ET. The exchange will be shut on Thursday for Independence Day.

Investors parsed stats released Wednesday morning showing softening in the economy ahead of Friday's all-important June jobs report. ADP data showed less private payroll growth than expected in June, while weekly jobless claims numbers came in higher than economists forecast.

A reading of service sector activity released later in the morning was considerably weaker than expected and indicated a contraction, according to the Institute for Supply Management.

These reports could concern investors about the state of the economy. But stocks found support from a decline in bond yields as traders grew increasingly hopeful that the Federal Reserve has seen sufficient evidence of economic tightening to begin cutting interest rates. Notably, the rate on the 10-year U.S. Treasury fell for a second day in a row on Wednesday.

Tesla's ongoing ascent after a better-than-expected deliveries report also boosted the broader market. The electric vehicle maker's stock jumped 6.5% on Wednesday, rising for a seventh straight session. That marked its first winning streak of that length in 2024.

"Everybody hated Tesla three months ago. But now, they're having their day in the sun," said Larry Tentarelli, chief technical strategist at the Blue Chip Daily Trend Report. Tesla's rally sets "a bullish tone for the market overall."

Artificial intelligence darling Nvidia jumped around 4.6%, also helping the tech-heavy Nasdaq outperform.

After Wednesday's early closing bell, traders will watch for minutes from the June Federal Open Market Committee meeting expected at 2 p.m. ET.

S&P 500 and Nasdaq Composite close at fresh all-time highs

The S&P 500 and Nasdaq Composite ended Wednesday's shortened session at new record highs.

The S&P 500 and Nasdaq climbed around 0.5% and nearly 0.9%, respectively. The Dow, on the other hand, ticked about 0.1% lower.

— Alex Harring

BTIG sees more than 20% upside for MGM

MGM Resorts International has an attractive fundamental story and a favorable risk/reward, according to BTIG. The firm initiated coverage of the stock with a buy rating and $52 price target, which suggests nearly 23% upside from Tuesday's close.

The casino operator should see upward estimate revisions in the near term, driven by Las Vegas and China, and healthy capital returns, analyst Clark Lampen wrote in a note Tuesday. He expects MGM's multiple to expand as concerns about Las Vegas fade.

Meanwhile, its digital opportunities and the new resort being built in Japan, coupled with other projects that could start to materialize over the next two years, show the "MGM story is diversifying in a healthy way," he said.

"As that happens, growth should improve, the equity base continue to shrink, and we see several ways for shareholders to win in both the near and medium/long term," Lampen added.

Shares of MGM were up 2.5% in afternoon trading.

— Michelle Fox

Diversifying does not historically protect investors from sell-offs, CFRA's Stovall says

The S&P 500's rally to all-time highs this year has many deliberating whether they should broaden out their exposure from the market cap-weighted benchmark in case of a pullback. However, CFRA's Sam Stovall said allocating toward an equal-weighted index historically does little to protect investors.

"If history is any guide, for it is never gospel, investors need to be reminded that the equal-weighted versions of cap-weighted benchmarks have typically endured deeper selloffs and reduced frequencies of outperformance of their cap-weighted cousins during declines of 10% or more for the S&P 500 (since 1990), Nasdaq-100 (2007), Russell 2000 (2000), and S&P SmallCap 600 (2011)," Stovall wrote Wednesday.

"As a result, history showed that the collective approach to investing has frequently not lessened the magnitude of the eventual decline," he added.

— Sarah Min

Stocks making the biggest moves midday

Here are the stocks on the move midday:

• Paramount Global — The media and entertainment stock popped more than 9% on news that Skydance Media has reached a preliminary merger deal with controlling shareholder National Amusements. Paramount Global's special committee is reviewing and voting on the agreement, CNBC reported, citing a person familiar with the matter.
• Tesla — The electric vehicle company jumped another 6%, bringing its week-to-date gains to 24%. The rally came after Tesla posted better-than-expected deliveries in the second quarter. Wedbush analyst Dan Ives hiked his 12-month price target on the Elon Musk-led company to $300 from $275 previously. The new forecast implies a 30% gain from Tuesday's close.
• MGM Resorts International — Shares moved 3.5% higher after BTIG initiated coverage of the casino operator with a buy rating and 52% price target, which implies nearly 23% upside from Tuesday's close. The firm said MGM is diversifying in a healthy way, which should improve growth.

Read the full list here.

— Sean Conlon

Constellation Brands slumps after mixed quarterly results

Shares of alcoholic beverage maker Constellation Brands declined 3% after posting mixed quarterly results.

The Modelo parent posted earnings of $3.57 per share, topping the $3.46 expected by analysts polled by LSEG. Revenue came in at $2.66 billion, compared to an LSEG estimate of $2.67 billion.

The company said it expects a 9% to 11% drop in operating income within its wine and spirits business for the year. Net sales are expected to grow between 6% and 7% due to strong beer sales.

This decline marks a turn for shares, which traded up earlier in the day.

— Samantha Subin

Russell 2000 even more exposed to financials, underweight tech, after rebalance

The recent shake-up of the Russell 2000 won't do much to change some of the factors that have hurt the small-cap index, according to Goldman Sachs analyst Deep Mehta.

The Russell 2000 has even more exposure to financials, such as regional banks, that have weighed on the group while large-cap indexes have reached new highs, according to a note from Goldman.

"The recent annual reconstitution increased the skew among small-caps towards Healthcare & Financials at the expense of Information Technology," the note said.

The underweight in technology is also a concern, given the importance of stocks tied to artificial intelligence in this market rally.

"Compared to the large-cap Russell 1000, small-caps underweight in Technology increased the most (to nearly 25pp from 22pp) and overweight increased the most in Healthcare (to 6pp from 3.9pp)," the note said.

— Jesse Pound

Oil prices hold firm as fears that Hurricane Beryl could disrupt supplies ease

Crude oil futures were little changed Wednesday as fears that Hurricane Beryl could disrupt Gulf Coast refineries eased.

West Texas Intermediate fell 13 cents to $82.68 per barrel, while Brent dropped 13 cents to $86.13 per barrel.

Prices hit two-month intraday highs Tuesday amid concerns that Beryl could hit Gulf Coast oil infrastructure. Prices ultimately closed lower, however, as the storm is expected to weaken into a tropical storm before potentially hitting south Texas as early as Sunday.

There are signs that demand may be picking up in the U.S., with crude oil inventories falling by 12.2 million barrels last week, according to the Energy Information Administration. Gasoline stockpiles declined by 2.2 million barrels.

Gasoline prices are averaging $3.51 per gallon ahead of the Fourth of July, up about 2 cents from last week.

"This decline in Crude levels might just have saved more of a sell off after the hurricane news," said John Evans, analyst at oil broker PVM.

— Spencer Kimball

Q2 GDP growth expectation down to 1.5%, according to Atlanta Fed tracker

The outlook for gross domestic product gains in the second quarter dimmed Wednesday following data showing a slowdown in services and spending, according to the Atlanta Federal Reserve.

The central bank branch's GDPNow tracker of incoming data indicates annualized growth of just 1.5% for the April-through-June period, according to the latest update. Earlier in the quarter, the gauge had been pointing to 4.2% growth.

However, recent data suggests an increase in personal consumption expenditures, a consumer spending proxy that accounts for about two-thirds of all GDP, of just 1.1% during the period, compared to 1.5% in the first quarter.

— Jeff Cox

12 stocks in the S&P 500 hit new 52-week highs

During Wednesday's trading session, 12 stocks in the S&P 500 index reached new 52-week highs.

Of these names, eight traded at new all-time highs. Stocks that hit this milestone included:

• Intercontinental Exchange trading at all-time-high levels back to its initial public offering in November 2005
• JPMorgan trading at all-time-high levels back to its IPO in 1983
• Eli Lilly trading at all-time-high levels back to 1952 when the company offered its first public shares of stock
• Apple Inc. trading at all-time-high levels back to its IPO in December 1980
• Fair Isaac trading at all-time highs back to when it was listed at the New York Stock Exchange in 1986
• Microsoft trading at all-time-high levels back to its IPO in March 1986
• Iron Mountain trading at all-time-high levels back to its IPO in July 1997
• Welltower trading at all-time-high levels back to its incorporation as Health Care REIT in 1985

On the other hand, three names that hit their 52-week lows were Pool Corp., Walgreens Boots Alliance and Weyerhaeuser.

— Lisa Kailai Han, Christopher Hayes

July 3 has historically been the best day of the summer

Wednesday could see strong performance from the stock market, if history is any guide.

July 3 has historically been the best day of the summer and one of the strongest days of the year with an S&P 500 average daily performance of 0.31% dating back to 1950, according to Ryan Detrick, chief market strategist at Carson Group.

— Yun Li

Metal ETFs rally on Wednesday

Silver, gold and copper miners were trading higher on Wednesday as the U.S. dollar waned following dovish remarks from Federal Reserve Chair Jerome Powell in the prior session.

Silver miners were up 4.3% on Wednesday and on pace for their best day since May 17, while gold miners were up 3.76% and on pace for their best day since March 20. Miners led by Endeavour Silver, First Majestic Silver, New Gold, Coeur Mining and Hecla were all up more than 5% on Wednesday.

Copper miners also gained 4%, tracking for their best day since May 17.

— Lisa Kailai Han, Gina Francolla

Consumer discretionary, tech leading weekly sector gains

Consumer discretionary is the best-performing sector in the S&P 500 for the week.

Tesla's 24% week-to-date jump has led the sector's gains. Automaker Ford has climbed 3%, followed by Amazon and Airbnb, up 2.4% and 1.5%, respectively.

Information technology was the second-highest outperforming sector during the period. On Semiconductor has advanced more than 7% since the start of the week. Broadcom and Apple are each 5.5% and 4.3% higher, respectively, during the period.

— Hakyung Kim

Strategist Marko Kolanovic is leaving JPMorgan

JPMorgan's Marko Kolanovic, who served as chief global markets strategist and co-head of global research, is leaving the bank to explore other opportunities, according to a source familiar with the internal announcement.

Kolanovic rose to prominence among market watchers for correctly predicting a stock market rebound in the middle of the Covid-19 pandemic. However, he has been consistently bearish over the past two years as the market has rallied.

— Jesse Pound

ISM services measure for June shows unexpected contraction

Service sector activity was considerably weaker than expected in June, according to an Institute for Supply Management report Wednesday.

The ISM Services PMI came in at 48.8%, representing the share of firms reporting expansion for the month. A reading below 50% indicates contraction, which the index has shown for two of the past three months. Economists surveyed by Dow Jones had been looking for a 52.8% reading, or 1 percentage point lower than May.

Elsewhere in the survey, the Business Activity Index tumbled to 49.6%, down 11.6 percentage points, and new orders fell 6.8 points to 47.3% while inventories slumped to 42.9%, down 9.2 points. The prices index edged lower as did the employment gauge.

— Jeff Cox

Expect a new bull market if the central bank cuts interest rates, says Jim Paulsen

Stocks can continue to gain from here after a strong first half of 2024, according to Jim Paulsen, author of the "Paulsen Perspectives" newsletter.

The S&P 500's run to records has been "narrow," he says, with only a few stocks winning because the Federal Reserve has been raising rates, something rarely seen during bull markets.

"[The bull market is] missing a lot of other pieces that could come if the Fed eases, the big one of course is lower bond yields and lower interest rates," Paulsen told CNBC's "Squawk Box" on Wednesday. "If the Fed does finally declare victory on inflation, which I think they're gonna, and we do cut rates, then I think we're gonna see a lot more stimulus come for the stock market and we kind of might have a move that looks a little like the start of a new bull market that we never got."

"This is the only bull market in post-war history that has existed entirely under a Federal Reserve which has tightened throughout its entire existence," he continued. "The result of that has been a very narrow bull market because a lot of its supportive pieces haven't showed up yet."

— Brian Evans

Stock futures are near flat

Stocks are little changed to kick off Wednesday's shortened trading day.

The S&P 500 and Nasdaq Composite both traded around flat shortly after 9:30 a.m. ET. The Dow traded up about 0.1%.

— Alex Harring

Jobless claims rise; continuing claims highest since November 2021

Initial claims for unemployment insurance edged higher for the week ending June 29, the Labor Department reported Wednesday.

First-time filings totaled 238,000 for the period, up 4,000 from the previous week and higher than the Dow Jones estimate for 233,000.

On continuing claims, which run a week behind, the total of 1.858 million represented an increase of 26,000 and was the highest total since Nov. 27, 2021.

— Jeff Cox

Private payrolls miss forecast for June

Private payrolls increased by 150,000 in June, less than forecast and the lowest total since January, according to an ADP report Wednesday.

The total was less than the 160,000 Dow Jones estimate and below the upwardly revised 157,000 from May. Leisure and hospitality led with 63,000 jobs, followed by construction and professional and business services.

Also, wage growth slowed to a 4.9% pace from a year ago, the smallest increase since August 2021.

— Jeff Cox

Stocks on the move before the bell

Here are the stocks making the biggest moves in premarket trading:

• Paramount Global — Shares of Paramount Global surged more than 12% on news that Skydance Media has reached a preliminary deal to buy National Amusements, the company's controlling shareholder. The New York Times and The Wall Street Journal first reported news of the agreement.
• Tesla — The electric vehicle maker rose nearly 3%, a day after posting stronger-than-expected delivery numbers for the second quarter. Shares popped 10% during Tuesday's session.
• Constellation Brands — The beer and wine stock rose more than 2% after a better-than-expected earnings report.

Read the full list of stocks moving here.

— Samantha Subin

Dollar index could break winning streak

The dollar index is poised to snap a four-week positive run.

The index, which measures the U.S. greenback against a basket of foreign currencies, has slipped about 0.2% week to date. If that holds through the week's end, it would mark its first negative week of the past five.

The dollar has gained ground against the yen this week, but has struggled compared to the euro and British pound sterling.

— Alex Harring, Gina Francolla

Tesla goes for 7-day winning streak

Tesla shares popped more than 3% in the premarket, putting the electric vehicle maker on pace for a seventh straight day of gains. That would be the stock's longest winning streak since a 13-day run seen last year.

"The key for Tesla's stock is the Street recognizing that Tesla is the most undervalued AI play in the market in our view with a historical Robotaxi Day ahead for Musk and Tesla on August 8th that will lay the yellow brick road to FSD and an autonomous future," Wedbush analyst Dan Ives wrote in a note dated Tuesday. He has an outperform rating on the stock.

— Fred Imbert

Consumer discretionary sector closes at highest level since 2022

The consumer discretionary sector popped 1.8% to close at its highest level since January 2022.

A 10.2% jump in Tesla shares helped lift the sector. The electric vehicle maker surged as its second-quarter vehicle production and delivery reports surpassed analysts' expectations.

E-commerce giant Amazon also contributed to the sector's gains, rising 1.4% and hitting a new all-time high.

Consumer discretionary was the outperformer of the 11 sectors in the S&P 500 on Tuesday, boosting the broad market index to a closing record of 5,509.01 and its first close above the 5,500 threshold.

— Darla Mercado, Chris Hayes

Paramount rallies 9% on news of reignited Skydance Media merger talks

Paramount Global shares surged 9% Tuesday night after The Wall Street Journal and The New York Times reported that Skydance Media has come to a preliminary agreement to buy National Amusements, the controlling shareholder of Paramount, and merge with the entertainment giant.

The news comes after National Amusements and Skydance called off talks for a deal in June.

Paramount declined to comment to CNBC on the news. National Amusements and Skydance did not immediately respond to CNBC's request for comment.

— Hakyung Kim, Rohan Goswami

Equity risks are due to rise in the latter half of the year, Goldman Sachs says

The first half of this year has been characterized by a technology-led rally within the equity markets. But as the latter half of the year kicks off, Goldman Sachs foresees the tides turning for investors.

"As we enter the second half of the year, the risks for equity holders are rising," wrote strategist Peter Oppenheimer. He also pointed to an uncertain backdrop that includes lofty valuations and increasing political risk.

However, Oppenheimer reassured investors by pointing to historical records indicating that a solid second half of the year usually follows a strong first half.

"Nonetheless, it should be stressed that it is unusual for 2H returns to be weak following 1H returns as strong as we have seen this year," he wrote.

— Lisa Kailai Han

Stock futures are flat Tuesday night

U.S. stock futures traded near the flatline Tuesday night.

Futures tied to the S&P 500 pulled back 0.1%. Dow Jones Industrial Average futures inched down 28 points, or 0.1%, and Nasdaq 100 futures also slipped 0.1%.

— Hakyung Kim