US stocks climbed to record highs on Wednesday, after investors turned to defensive assets amid reports showing that economic recovery slowed. The S&P 500, for example, closed 0.2% higher, while energy and financial stocks fell.

According to the report released by ADP yesterday, US companies added fewer jobs than expected in August as supply chain bottlenecks were accompanied by labor shortages despite manufacturing activity expanding at a faster pace than anticipated. The data was released ahead of Friday's employment report, with analysts expecting a slowdown in growth amid rapid increase in the previous month and lower unemployment rates.

But Mike Loewengart, managing director at E*Trade Financial, said the report is not the key indicator of how the rest of employment data will develop. Although it signals that growth is slowing down, this may be the best for the markets as it means that money policy will remain soft.

As such, Linda Dussel, senior strategist at Federated Hermes, said it is too early for a bearish sentiment since a rebound may occur soon. She told Bloomberg TV on Wednesday that strong earnings and financial stimulus could push stocks higher.

Meanwhile, Tobias Levkovich of Citigroup sticks to a bearish call and predicts that equities will hit 4,000 at the end of the year and will reach 4,350 by June 2022. This projection is based on overpricing and planned tax increases that will hurt corporate profits.