Mixed Market Sentiment Amid Fresh Jobs Data and Fed Expectations
US stocks traded in a mixed bag on Tuesday, as investors digested new jobs data and awaited further guidance from Federal Reserve policymakers. The S&P 500 slipped 0.2%, while the Nasdaq Composite hovered around the flat line, coming off fresh records. The Dow Jones Industrial Average reversed earlier gains to fall roughly 0.4%.
Job Openings Rise, Quits Rate Increases
According to the Bureau of Labor Statistics, job openings rose by 372,000 to 7.74 million in October, surpassing estimates of 7.52 million. The Job Openings and Labor Turnover Survey (JOLTS) also showed fewer hires were made during the month, while the quits rate, a sign of confidence among workers, rose to 2.1% from 1.9% in September.
Fed Rate Cut Odds Increase
Traders are now pricing in about a 69% chance that the Fed will lower rates by a quarter percentage point at its December 18 meeting, compared with 62% a day ago. Fed policymakers Austan Goolsbee and Adriana Kugler are set to appear later on Tuesday, which will set the stage for Fed Chair Jerome Powell’s panel discussion on Wednesday.
Corporate News
Tesla stock slipped in early trading after shipments of the EV maker’s China-built models fell again, putting sales targets in doubt. Meanwhile, shares in US Steel fell about 8% on the heels of President-elect Donald Trump’s promise to “block” its $15 billion takeover by Japan’s Nippon Steel.
Sector Performance
Communication Services, Health Care, and Energy led Tuesday’s sector action, while Industrials was the day’s biggest laggard, dragged down by shares of Aflac, which fell 4% as investors weighed a disappointing outlook. Financials and Consumer Staples also fell.
Economic Outlook
Economists at Bank of America expect the US economy to grow at an annualized rate of 2.4% in 2025, higher than current forecasts for 2% growth. The US economy is on solid footing right now, and economists believe it will stay that way through next year, despite uncertainties surrounding the economic policies of President-elect Donald Trump.
Oil Prices Surge
Oil prices stood out, with WTI crude climbing 3% to trade above $70 a barrel. Brent crude, the international benchmark, also rose to trade just below $74 a barrel.
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