STORY: The S&P 500 and Nasdaq closed at record highs on Wednesday, as did shares of Nvidia, whose market cap crossed the $3 trillion mark for the first time, pushing the AI darling past Apple to become the world's second most valuable company.

The Dow gained a quarter of a percent, the S&P 500 rose nearly 1.2% and the Nasdaq soared almost 2%.

The May private payrolls report on Wednesday became the latest data to suggest an easing labor market, which could prompt the Federal Reserve to begin cutting interest rates this year. This followed a report on Tuesday that showed job openings fell in April to the fewest in more than three years.

Michael Mussio is president and managing director of FBB Capital Partners.

"A tightening labor market would indicate that the rate rises that occurred through '22 in the first half of' 23 are are finally coming through. Everybody always says - we forget this when they're raising or cutting - but they always say, 'Well, it takes 6 to 12 months.' Well, guess what? We are one month away almost now. July 23 was the last rate increase in this rate-hiking cycle. [FLASH] And here we are 12 months later and some of these data points around inflation, is which is coming down, but also employment which is tightening a little bit, these are things that you would expect to see."

Traders now see a nearly 70% chance of a September rate cut, according to the CME's FedWatch tool.

Among stock movers, Taiwan Semiconductor Manufacturing joined Nvidia in the chip rally. Its shares gained nearly 7%, also closing at a record high.

Hewlett Packard Enterprise rose more than 10.5% after forecasting third-quarter revenue above Street expectations, helped by upbeat demand for its AI servers.

And Dollar Tree slipped nearly 5% after a disappointing quarterly profit forecast. The budget retailer said it would explore options that include a potential sale or spinoff of Family Dollar.