The major U.S. index futures are currently pointing to a higher open on Wednesday, with stocks likely to move to the upside following the lackluster performance seen in the previous session.

Early buying interest may be generated in reaction to a report from payroll processor ADP showing private sector employment in the U.S. increased by less than expected in the month of November.

ADP said private sector employment rose by 103,000 jobs in November after climbing by a downwardly revised 106,000 jobs in October.

Economists had expected private sector employment to advance by 130,000 jobs compared to the addition of 113,000 jobs originally reported for the previous month.

“Restaurants and hotels were the biggest job creators during the post-pandemic recovery,” said ADP chief economist Nela Richardson. “But that boost is behind us.”

She added, “The return to trend in leisure and hospitality suggests the economy as a whole will see more moderate hiring and wage growth in 2024.”

The weaker than expected private sector job growth may add to recent optimism the Federal Reserve is done raising interest rates and could cut rates as early as next March.

Potentially adding to the positive sentiment, the Labor Department also released a report showing the decrease in unit labor costs in the third quarter was revised to 1.2 percent from 0.8 percent. The drop in unit labor costs was expected to be revised to 0.9 percent.

After recovering from an initial move to the downside, stocks showed a lack of direction over the course of the trading session on Tuesday. The major averages spent the day bouncing back and forth across the unchanged line before closing narrowly mixed.

While the tech-heavy Nasdaq rose 44.42 points or 0.3 percent to 14,229.91, the S&P 500 edged down 2.60 points or 0.1 percent to 4,567.18 and the Dow dipped 79.88 points or 0.2 percent to 36,124.56.

The initial weakness on Wall Street came as traders continued to cash in on recent strength in the markets amid concerns optimism about the outlook for interest rates has led to overbought conditions.

While the Federal Reserve is widely expected to leave interest rates unchanged in the coming months, traders may need more evidence to solidify hopes of a rate cut in the near future.

The subsequent rebound came as a Labor Department report may have reinforced those hopes, showing a bigger than expected decrease in U.S. job openings in the month of October.

The report said job openings slid to 8.73 million in October from 9.35 million in September, falling to the lowest level since March 2021. Economists had expected job openings to edge down to 9.30 million.

Meanwhile, a separate report released by the Institute for Supply Management showed service sector activity in the U.S. grew at a slightly faster rate in the month of November.

The ISM said its services PMI crept up to 52.7 in November from 51.8 in October, with a reading above 50 indicating growth. Economists had expected the index to inch up to 52.0.

On Friday, the Labor Department is scheduled to release its closely watched monthly jobs report, which could have a significant impact on the outlook for interest rates.

Economists currently expect employment to increase by 185,000 jobs in November after rising by 150,000 jobs in October, while the unemployment rate is expected to hold at 3.9 percent.

Oil service stocks came under pressure over the course of the session, dragging the Philadelphia Oil Service Index down by 2.3 percent to a five-month closing low.

The weakness among oil service stocks came amid a decrease by the price of crude oil, with crude for January delivery falling $0.72 to $72.32 a barrel.

A modest decrease by the price of gold also weighed on gold stocks, as reflected by the 1.9 percent loss posted by the NYSE Arca Gold Bugs Index.

Natural gas, airline and networking also saw notable weakness on the day, while modest strength was visible among software and retail stocks.