U.S. stocks were mixed on Tuesday as investors digested new job openings data and awaited future remarks from Federal Reserve officials. The S&P 500 slipped 0.2%, while the Nasdaq Composite stayed close to the flatline, following its recent record highs. The Dow Jones Industrial Average reversed early gains to fall roughly 0.4%.
Fresh data from the Bureau of Labor Statistics (BLS) revealed that job openings increased to 7.74 million in October, surpassing expectations and suggesting a still-tight labor market. However, there was a decline in hiring activity, and the quits rate, a measure of worker confidence, rose to 2.1%. This report adds to a week of key economic data, with investors now awaiting more insights, including Federal Reserve speeches, for clues on future interest rate cuts.
Market Movers:
- Tesla (TSLA): Tesla shares dropped early in the session after shipments of China-made electric vehicles once again showed a decrease, raising doubts about meeting sales targets in one of Tesla's most important markets. Additionally, CEO Elon Musk's $56 billion pay package was rejected by a judge, further weighing on investor sentiment.
- U.S. Steel (X): U.S. Steel shares fell approximately 8% after President-elect Donald Trump vowed to block the company’s $15 billion acquisition of Nippon Steel. Trump’s stance on steel tariffs and tax incentives for American manufacturers has cast doubt on the deal’s viability, creating a drag on U.S. Steel’s stock price.
- Aflac (AFL): Shares of Aflac fell by 4% following a disappointing earnings outlook. The company reported weaker-than-expected guidance, and investors reacted negatively to its prospects for the upcoming quarters, further pressuring the insurance sector.
- ExxonMobil (XOM): ExxonMobil saw a slight increase after oil prices rose nearly 3% to above $70 a barrel. Stronger-than-expected oil demand and a tightening supply outlook provided a boost to ExxonMobil, though it remained under pressure from broader market movements.
Economic Outlook and Fed Watch
Markets are now pricing in a 69% chance that the Federal Reserve will cut interest rates by 0.25% at its final meeting of the year on December 18. This is an increase from the 62% probability seen just a day earlier. Investors are closely watching the upcoming comments from Fed officials, including Austan Goolsbee and Adriana Kugler, who will speak later today. These remarks could offer further clarity on the Fed’s stance regarding future rate cuts.
On the economic front, Bank of America has projected that the U.S. economy will maintain solid growth through 2025, despite uncertainties surrounding the policies of President-elect Donald Trump. Bank of America’s economists expect the economy to expand at an annualized rate of 2.4%, above current expectations for 2% growth, which is positive news for markets looking for signs of strength amidst potential economic challenges.
Looking Ahead
The focus will remain on labor market data, with Friday’s monthly jobs report set to be the most anticipated release this week. Economists are forecasting a rebound in job growth, with an expected 220,000 jobs added in November, up from the significantly weaker 12,000 jobs added in October. Investors are eager to see how the labor market has performed, particularly given the recent volatility in job openings and quits data. This report could have significant implications for the Fed’s next policy moves, and markets will be closely watching to see if the data supports the case for further rate cuts.