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The New York Stock Exchange (NYSE) in New York City, U.S., February 24, 2022. REUTERS/Caitlin Ochs/File Photo Acquire Licensing Rights
Dec 5 (Reuters) – Wall Street’s main indexes were mixed on Tuesday as investors assessed a fresh batch of economic data, including a jobs report, to gauge the probability of rate cuts by the Federal Reserve early next year, while megacap stocks rebounded from the previous day’s losses.
U.S. job openings dropped in October to the lowest level since early 2021, indicating that the labor market was easing, while U.S. services sector activity picked up in November.
“The data is better than expected, meaning that the job market is weaker, but it’s not so weak that it requires maybe a Fed rate cut or a jeopardy of a recession,” said Paul Nolte, senior wealth adviser and market strategist at Murphy & Sylvest.
“And it’s certainly not strong enough to say the Fed is going to need to raise rates.”
After a strong run of gains in November that sent the S&P 500 (.SPX) to its closing high for the year, U.S. equities pulled back in the previous session as Treasury yields rose.
A majority of traders believe the Fed may have reached the end of its tightening campaign, given that inflation is easing, and have nearly fully priced in the possibility that the central bank will keep rates unchanged next week.
They are also betting on lower interest rates next year, with 65% pricing in a rate cut of at least 25 basis points in March and 89% in May, according to the CME Group’s FedWatch tool.
On Friday, the more comprehensive non-farm payrolls report for November will offer greater clarity on the state of the labor market.
Megacap stocks, which took a beating on Monday, rose as Treasury yields fell back to multi-month lows. Nvidia (NVDA.O), Amazon.com (AMZN.O) and Apple (AAPL.O) rose between 1% and 2.2%, while Tesla <TSLA.O> jumped 4.0% after four straight days of losses.
Global markets would be swayed by greater volatility in 2024 as the Fed cuts benchmark interest rates fewer times than futures markets are pricing in, strategists at the BlackRock Investment Institute said in a panel discussion on Tuesday.
Eight of 11 major S&P 500 sectors traded in the red, with materials (.SPLRCM) leading declines. The small-cap Russell 2000 index (.RUT) fell 1.1% after a four-day winning streak.
At 11:24 a.m. ET, the Dow Jones Industrial Average (.DJI) was down 140.27 points, or 0.39%, at 36,064.17, the S&P 500 (.SPX) was down 6.16 points, or 0.13%, at 4,563.62, and the Nasdaq Composite (.IXIC) was up 34.89 points, or 0.25%, at 14,220.39.
Among individual stocks, Take-Two Interactive Software (TTWO.O) fell 1.9% after a trailer of the latest installment of its best-selling “Grand Theft Auto” videogame franchise was released.
CVS Health (CVS.N) rose 3.4% on forecasting 2024 revenue above Wall Street estimates, as the insurer expects to benefit from its expansion into health services.
Declining issues outnumbered advancers for a 1.99-to-1 ratio on the NYSE and for a 1.76-to-1 ratio on the Nasdaq.
The S&P index recorded eight new 52-week highs and no new lows, while the Nasdaq recorded 60 new highs and 47 new lows.
Reporting by Amruta Khandekar and Shristi Achar A; Editing by Pooja Desai
Our Standards: The Thomson Reuters Trust Principles.
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
