The S&P 500 and the tech-heavy Nasdaq Composite gained around 0.1% after erasing earlier losses, the Dow Jones Industrial Average added nearly 0.4%
US stocks flipped between negative and positive territory on Tuesday, closing narrowly in the green as investors shifted their rate-cut expectations following further weaker-than-expected economic data.
The S&P 500 and the tech-heavy Nasdaq Composite gained around 0.1 per cent after erasing earlier losses. The Dow Jones Industrial Average added nearly 0.4 per cent.
Stocks have struggled to find a footing in recent days as investors face uncertainty over the path of interest rates. Recent weak manufacturing data has prompted Wall Street strategists to pare back their optimism for economic growth, which supports a case for rate cuts. But Fed officials have cautioned against hoping for a pivot anytime soon as they wait for inflation to drop sufficiently — and when that time comes isn’t clear.
New government data on Tuesday showed that job openings dropped in April to their lowest level since February 2021 as the labor market shows further signs of rebalancing. The labor market update serves as a precursor to the crucial May jobs report on Friday — the data highlight of the week.
Traders have adjusted their expectations for rate cuts in recent days, as per the CME FedWatch tool. Nearly two-thirds now expect at least one cut by the Federal Reserve’s September meeting, a sizable gain from one week ago.
Meanwhile, the GameStop rally — just one part of the jumpy summer start for stocks — lost steam on Tuesday, on the heels of a 21 per cent jump for the meme stock. Shares of the video game retailer dropped nearly 5 per cent.
