U.S. stocks on Tuesday were on track to end lower, with the benchmark S&P 500 and the blue-chip Dow taking a breather after a four-day rally. The tech-heavy Nasdaq extended its losses to a second straight session.
Meanwhile, Treasury yields retreated after softer-than-expected job openings data bolstered bets that the Federal Reserve would end its rate-hiking campaign at its May monetary policy committee meeting.
Into the final hour of trading, the Nasdaq Composite (COMP.IND) was down 0.69% to 12,105.94 points. The S&P 500 (SP500) slipped 0.71% to 4,095.08 points, while the Dow (DJI) declined 0.70% to 33,366.59 points.
Of the 11 S&P sectors, nine were trading in the red. The Energy sector gave up some of its massive gains from Monday, when it had risen in tandem with crude prices (CL1:COM) (CO1:COM) after the OPEC+’s surprise oil production cut.
February’s JOLTS report showed job openings of 9.931M, much lower than the expected 10.4M figure. It was the first time the number dropped below the 10M mark since May 2021, pointing to continued cooling in the highly resilient labor market. The data suggested that the Fed’s aggressive interest rate hikes were finally having their intended effect.
“Overall, the jobs market is loosening, but not yet to a point where inflation pressures stemming from the labor market can be waved away,” Wells Fargo’s Sarah House said, adding that the JOLTs data showed “a jobs market that is still strong, but past its prime. Total job openings and voluntary departures remain elevated relative to the hey-day of the past cycle, but have clearly downshifted over the past year as the tumult around COVID moves further into the rearview mirror.”
Investors will now be looking ahead to the March employment report for further clues about the labor market. The data is due on Good Friday which is a market holiday, but not a federal holiday.
Moreover, according to the CME FedWatch tool, the expectations of no hike at the Fed’s monetary policy committee meeting in May has now surged to nearly 59% after the JOLTS data.
Among active movers, ServiceNow (NOW) was among the top percentage gainers on the S&P 500 (SP500) after Baird upgraded the stock, citing the company’s “end-market resiliency” and “durable” growth trends.