Wall Street ends mixed after job openings hint at cooling economy
Dec 5 – Wall Street finished on a mixed note on Tuesday as investors digested fresh employment data that indicated the U.S. economy may be cooling down, leading to bets that the Federal Reserve could cut interest rates as early as March.
The S&P 500 edged slightly lower, losing 0.04% or 1.91 points to close at 4,567.77 points. The technology-heavy Nasdaq Composite, on the other hand, gained 0.31% or 46.91 points to finish at 14,232.41. The Dow Jones Industrial Average slipped 0.21% or 74.51 points to settle at 36,129.93.
The decline in job openings in October, reaching the lowest level since early 2021, has raised concerns about the state of the labor market. This data points to a potential easing in the labor market as companies pull back on job openings.
As interest rates rise and as demand slows, companies are pulling back on job openings, which is essentially what the Fed wants, explained Sam Stovall, chief investment strategist at CFRA Research.
Stovall added, The Fed probably is done raising rates, and the only question outstanding is when they start to cut.
However, another report indicated that the U.S. services sector experienced growth in November, providing a glimmer of hope for the economy.
Investors are closely watching for further clarity on the labor market with the release of the more comprehensive non-farm payrolls report for November on Friday.
The stock market, which rebounded nearly 9% in November, has been experiencing uneven trading this week. Investors anticipate that the Federal Reserve will maintain its current interest rates at the upcoming meeting, but interest rate futures suggest a 65% probability of a rate cut by the Fed’s March meeting.
Several megacap tech companies, including Apple, Nvidia, Amazon.com, and Tesla, saw gains as Treasury yields dipped to multi-month lows.
Meanwhile, Take-Two Interactive Software faced a decline in its stock value after releasing a trailer for the latest installment of its popular Grand Theft Auto video game franchise.
In contrast, CVS Health saw its stock rise as the company provided an optimistic revenue outlook for 2024. CVS Health expects to benefit from its expansion into health services.
Looking ahead, global markets could experience greater volatility in 2024, according to strategists at the BlackRock Investment Institute. They predict that the Federal Reserve will cut benchmark interest rates fewer times than what futures markets are currently pricing in.
Overall, Wall Street’s performance reflects the current uncertainty surrounding the economy and the path the Federal Reserve will take regarding interest rates in the coming months.
(Reporting by Amruta Khandekar and Shristi Achar A in Bangalore and by Noel Randewich in Oakland, Calif.; Editing by Pooja Desai and Aurora Ellis)
