Stocks finished higher Tuesday as markets looked for a direction in the face of weakening economic data.
The Dow Jones Industrial Average climbed 140.26 points, or 0.36%, to close at 38,711.29, while the S&P 500 added 0.15% to finish at 5,291.34, and the tech-heavy Nasdaq rose 0.17% to 16,857.05.
The Job Openings and Labor Turnover report, better-known as Jolts, showed 8.059 million positions went unfilled in April, the lowest in nearly three years and down from the 8.355 million tally from March.
Jeffrey Roach, chief economist for LPL Financial, said openings-to-unemployed ratio declined to 1.24, matching pre-pandemic levels and revealing a loosening labor market.
“This metric was specifically called out by Chairman Powell in his warnings about a tight labor market,” he said. “But now, investors should likely see some easing in wage growth in the coming months. Overall, this report suggests wages will not likely create inflationary headwinds throughout the balance of 2024.”
Updated at 1:18 PM EDT
Stocks flat
A pullback in Treasury yields is helping stocks pare earlier declines heading into the afternoon session, with the Dow edging into positive territory and the S&P 500 last marked 12 points, or 0.24% lower. The Nasdaq was last seen 38 points, or 0.23% to the downside.
Benchmark 10-year note yields were last marked 6 basis points lower at 4.326 while 2-year notes were trading at 4.766%
More of the same today for government #bonds and #oil — that is, lower yield and price — as #markets react to another downside miss on US economic data.
— Mohamed A. El-Erian (@elerianm) June 4, 2024
Having said that, the second quarter charts look quite different …#economy #econtwitter pic.twitter.com/YW4jOQ8T0b
Updated at 11:44 AM EDT
Rate cut bets
The weaker-than-expected reading for April job openings, which showed a near 300,00 decline from March levels, has added heft to rate traders betting on an autumn Fed rate cut.
The CME Group's FedWatch, which was indicating chances of an autumn reduction at no better than a coin flip last week, is now pricing in a 65% chance that the Fed will trim its current Fed Funds rate by at least 25 basis points on September 18.
"Job openings have returned to pre-pandemic levels, which is good news on the inflation front," said Jamie Cos, managing partner for Harris Financial Group. "Higher for longer wears thin if the labor market gets much weaker."
The tightest labor market in US history continues to loosen. Job Openings have moved down to 8 million, the fewest since February 2021.https://t.co/l5IYmkf6Ih pic.twitter.com/ZmuABT9AMA
— Charlie Bilello (@charliebilello) June 4, 2024
Updated at 10:07 AM EDT
Jolted
The Labor Department reported a bigger-than-expected decline in April job openings, as well as a downward revision to the March reading, suggesting employment market weakness heading into the spring and summer months.
The Job Openings and Labor Turnover report, better-known as Jolts, showed 8.059 million positions went unfilled in April, the lowest in nearly three years and down from the 8.355 million tally from March.
Benchmark 10-year note yields eased to 4.341% in the wake of the release, having hit a multi-month high of 4.62% only last week, with 2-year notes pegged at 4.768%
The U.S. dollar index was little-changed at 104.131
Latest JOLTS report suggests that the labor market is steady.
— Julia Pollak (@juliaonjobs) June 4, 2024
Openings fell to 8.1M, but hires and quits ticked upwards to 5.6M and 3.5M, respectively.
Layoffs remained historically low at 1.5M.
Updated at 9:37 AM EDT
Lower open
The S&P 500 was marked 15 points, or 0.3% lower in the opening minutes of trading, while the Dow fell just under 100 points from last night's close.
The tech-centered Nasdaq, meanwhile, slipped 63 points, or 0.37%.
S&P 500 Opening Bell Heatmap (Jun. 04, 2024)$SPY -0.27% 🟥$QQQ -0.11% 🟥$DJI -0.35% 🟥$IWM -0.64% 🟥 pic.twitter.com/u70yACwsGy
— Wall St Engine (@wallstengine) June 4, 2024
Updated at 9:08 AM EDT
Tesla chip fight
Tesla (TSLA) shares slipped lower in early trading following a report from CNBC that suggested CEO Elon Musk pushed Nvidia to deliver its high-end AI chips to X and XAi, his social media and AI companies, while delaying shipments to the carmaker.
Citing information from Nvidia emails, CNBC said the move conflicts with Musk's comments to investors in April that Tesla would receive between 35,000 to 85,000 H100 Nvidia chips before the end of the year.
Tesla shares were marked 0.33% lower in premarket trading to indicate an opening bell price of $175.50 each.
Related: Elon Musk's latest move could cause a big Tesla problem
Updated at 8:47 AM EDT
Intel: Enter Xenon
Intel shares are moving higher in early trading, but remain more than 40% lower for the year and 35% south over the past five years, as the chipmaker looks to reverse its longtime slump by taking the AI fight directly to rivals Nvidia (NVDA) and Advanced Micro Devices (AMD) with a new lineup of chips priced at a heavy discount.
Intel shares were last marked 1.4% higher in premarket trading to indicate an opening bell price of $30.71 each.
Related: Intel stock jumps as it takes fight to Nvidia and AMD with new AI lineup
Stock Market Today
Stocks ended mixed at the close of the Monday session, with tech-led gains for the S&P 500 and the Nasdaq partly offset by another pullback for the Dow Jones Industrial Average, tied in part to softening manufacturing data.
The Institute for Supply Management's benchmark survey of factory activity in May showed another contraction, but the steeper-than-expected decline, as well as elevated price pressures, added to the market's nascent stagflation concern.
Related: The Fed doesn't want to talk about stagflation. It might not have a choice.
The Atlanta Fed's GDPNow forecasting tool, meanwhile, trimmed its current-quarter growth estimate to 1.8%, not far off the 1.3% pace the economy ended with over the first quarter.
The softening outlook, as well as a move by the OPEC cartel to open the door to unwinding production cuts, pulled oil prices firmly lower in overnight dealing. WTI crude futures for July delivery were falling $1.64 to $72.58 per barrel.
Treasury note yields continued their recent slide as well, with 10-year notes easing to 4.391% and 2-year paper trading at 4.81%.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.14% higher in the overnight session but is trading near two-month lows at 104.291.
The moves are also boosting the odds of a Federal Reserve rate cut in September, as investors bet that slowing growth will lead to a rise in unemployment and softer inflation prospects.
CME Group's FedWatch now pegs the chances of a September reduction at around 61.5%, but sees no chance in the Fed's current rate of 5.25% to 5.5% either next week or in July.
Heading into the start of the trading day on Wall Street, futures contracts tied to the S&P 500 suggest a 25-point opening-bell decline with a 190-point pullback for the Dow.
The tech-focused Nasdaq, meanwhile, is called 85 points lower, with an outsized gain for Intel (INTC) keeping the pullback in check.
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In Europe, the regionwide Stoxx 600 was marked 0.84% lower in Frankfurt, with energy stocks trading at a two-month low, while Britain's FTSE 100 down 0.54% in London.
Overnight in Asia, Japan's Nikkei 225 edged 0.22% lower in Tokyo. The regionwide MSCI ex-Japan benchmark fell 1.44% into the close of trading, weighed down by a big decline in India markets amid the likely narrower-than-expected electoral win for Prime Minister Narendra Modi.
Related: Veteran fund manager picks favorite stocks for 2024
