On Tuesday, U.S. stocks hovered close to their historical peaks as investors absorbed new employment data and awaited comments from Federal Reserve officials that could either cement or undermine the rising anticipation of future interest rate cuts.
In the early hours of trading, both the S&P 500 and the tech-centric Nasdaq Composite lingered near the neutral line, fresh off record highs. Meanwhile, the Dow Jones Industrial Average saw a reversal from earlier gains, dipping by roughly 0.1%.
Data from the Bureau of Labor Statistics revealed a jump in job openings by 372,000, bringing the total to 7.74 million in October, surpassing the expected 7.52 million. The Job Openings and Labor Turnover Survey (JOLTS) also highlighted a decline in hires for the month and noted an increase in the quits rate to 2.1%, up from 1.9% in September, which typically signals growing confidence among workers.
This JOLTS report kicks off a crucial week culminating in Friday’s significant monthly U.S. payrolls data. Currently, the probability of the Fed cutting rates by a quarter percentage point at its meeting on December 18 has climbed to approximately 74%, up from 62% the previous day, according to the CME FedWatch tool. These probabilities might change following appearances by Fed policymakers Austan Goolsbee and Adriana Kugler later on Tuesday, which will set the tone for Fed Chair Jerome Powell’s panel discussion on Wednesday.
On the corporate side, Tesla’s stock dipped in early trading after a decline in deliveries of its China-manufactured models cast doubt on its sales targets. Additionally, a judge once again dismissed CEO Elon Musk’s $56 billion compensation package.
Meanwhile, shares of U.S. Steel dropped about 8% as President-elect Donald Trump vowed to prevent its $15 billion acquisition by Japan’s Nippon Steel. Trump indicated that tax incentives and tariffs would allow the American steel giant to prosper independently.
Political unrest in France is drawing market attention, with the government facing potential collapse due to an impending parliamentary vote. Concurrently, Germany is approaching a snap election following governmental instability, leading Wall Street to closely monitor the situation in these two key EU countries.
Turning back to the JOLTS data, job openings in October rose more than anticipated, reflecting on the slowing labor market as the year winds down and prompting further speculation on how aggressively the Federal Reserve might cut interest rates next year.
New insights from the Bureau of Labor Statistics further detailed that 7.74 million jobs were reported open at the end of October, a climb from September’s tally of 7.37 million. That September number had been revised down from an initially reported 7.44 million. Economists had forecasted October’s openings to come in at 7.51 million.
In addition, the JOLTS survey also indicated 5.31 million hires occurred during the month, a decline from 5.58 million in September. The hiring rate fell to 3.3% from 3.5% the previous month. Notably, the quits rate, which signifies worker confidence, increased to 2.1% from 1.9%.
Investors are now eagerly awaiting more key data this week, which begins with Tuesday’s look at JOLTS job openings for October and ends with Friday’s critical monthly U.S. payrolls report.
Meanwhile, the second day following a major shake-up at Intel’s executive level has sparked numerous analyses. The future for Intel remains crucial for the United States, as the chip supply chain cannot remain overly reliant on Taiwanese manufacturer Taiwan Semiconductor.
Evercore ISI analyst Mark Lipacis dropped some noteworthy insights on this topic today, especially regarding the implications of Intel CEO Pat Gelsinger’s departure. While Gelsinger’s exit is notable, the broader trajectory for Intel is set to be exceedingly challenging as the company navigates diversifying its supply strategy.
