NEW YORK: Wall Street finished mixed on Tuesday (Dec 5) after fresh employment data bolstered bets that the US Federal Reserve (Fed) will cut interest rates as soon as March.
The Dow Jones Industrial Average closed down 79.72 points, or 0.22%, to 36,124.72, the S&P 500 lost 2.59 points, or 0.06 %, to 4,567.19 and the Nasdaq Composite gained 44.42 points, or 0.31 %, to 14,229.91.
Wall Street’s most valuable companies rose as Treasury yields dipped to multi-month lows. Nvidia and Apple rose more than 2%, while Amazon.com and Tesla gained more than 1%.
Most S&P 500 sector indices ended down after data showed US job openings dropped in October to the lowest level since early 2021, indicating that the labour market was easing.
“As interest rates rise and as demand slows, companies are pulling back on job openings, which is essentially what the Fed wants,” said Sam Stovall, chief investment strategist at CFRA Research in New York.
“The Fed probably is done raising rates, and the only question outstanding is when they start to cut,” Stovall said.
Another report showed US services sector activity picked up in November.
The small-cap Russell 2000 index fell 1.4%, ending a four-day winning streak.
US stock trading this week has been uneven after the S&P 500 rebounded nearly 9% in November. The index on Friday touched a four-month intra-day high.
Stock market investors widely expect the Fed will keep rates unchanged at its meeting next week. Interest rate futures also suggest a 65% probability of a rate cut by the Fed's March meeting, 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 labour market.
Global markets will 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 predicted in a panel discussion.
CVS Health jumped 3.7% after forecasting 2024 revenue above Wall Street estimates, as the insurer expects to benefit from its expansion into health services.
Declining stocks outnumbered rising ones within the S&P 500 by a 4.5-to-one ratio.
The S&P 500 posted 15 new highs and no new lows; the Nasdaq recorded 83 new highs and 69 new lows. – Reuters
