Market Update: Stocks Mixed Amid Fresh Jobs Data and Fedspeak
The US stock market closed mixed on Tuesday, as investors digested fresh jobs data and new comments from Federal Reserve officials regarding interest rates. The S&P 500 and Nasdaq Composite both claimed new records, finishing the session up about 0.1% and 0.4%, respectively. The Dow Jones Industrial Average recovered from session lows but still closed down nearly 0.2%.
Job Openings Rise, Quits Rate Increases
The Job Openings and Labor Turnover Survey (JOLTS) showed that job openings rose by 372,000 to 7.74 million in October, exceeding estimates of 7.52 million. The quits rate, a sign of confidence among workers, rose to 2.1% from 1.9% in September. This marked the first increase in the quits rate since May 2023.
Fed Officials Signal More Rate Cuts Ahead
Federal Reserve policymakers Mary Daly, Austan Goolsbee, and Adriana Kugler suggested that interest rates will continue to fall as the central bank brings policy closer to a more neutral setting. Fed Chair Jerome Powell is set to speak on Wednesday. Treasury yields rose following the comments, with the yield on the 10-year note inching up about 3 basis points to trade near 4.22%.
Market Reaction
Traders are now pricing in about a 72% chance that the Fed will lower rates by a quarter percentage point at its Dec. 18 meeting, compared with 62% a day ago. Shares in US Steel fell about 8% after President-elect Donald Trump promised to “block” its $15 billion takeover by Japan’s Nippon Steel.
Global Markets React to South Korean President’s Decision
South Korean President Yoon Suk Yeol’s decision to impose martial law, and then quickly reverse course, left global markets reeling on Tuesday. The iShares MSCI South Korea ETF dropped as much as 6% to hit a year-to-date low. Shares somewhat recovered following the president’s decision to withdraw the troops.
Safe-Haven Assets Climb
Safe-haven assets like gold and Treasury yields climbed in response to the global market uncertainty. Bitcoin, viewed as a riskier asset, fell 1% to trade just below $95,500 a token.
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, with economists at Bank of America projecting it to stay that way through next year.
Sector Action
Communication Services, Health Care, and Energy led Tuesday’s sector action. Markets traded mixed as traders assessed new jobs data and awaited more Fedspeak. 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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