Stock market today: Wall Street holds steady as bets rise for rate cuts following job-openings data

By Stan Choe, The Associated Press on June 4, 2024.

NEW YORK (AP) – U.S. stocks held relatively steady after a report suggested the job market is cooling. The S&P 500 edged up 0.2% Tuesday. The Dow Jones Industrial Average rose 0.4%, and the Nasdaq composite added 0.2%. Treasury yields slid after the report showed U.S. employers advertised fewer job openings at the end of April than economists expected. Wall Street actually wants the job market and overall economy to slow. That could convince the Federal Reserve to cut interest rates. The question is whether the slowdown for the economy overshoots and ends up in a painful recession that drags down corporate profits.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

NEW YORK (AP) – U.S. stocks are holding relatively steady Tuesday after a report suggested the job market is cooling, which carries the upside of making the cuts to interest rates that Wall Street desires more likely.

The S&P 500 was edging down by 0.1% in late trading. The Dow Jones Industrial Average was up 75 points, or 0.2% with less than an hour remaining in trading, and the Nasdaq composite was 0.1% lower.

The action was stronger in the bond market, where Treasury yields slid after Tuesday morning’s report showed U.S. employers were advertising fewer job openings at the end of April than economists expected.

Wall Street actually wants the job market and overall economy to slow. That could help get inflation under control and convince the Federal Reserve to cut interest rates, which would ease the pressure on financial markets. Traders upped their expectations for coming cuts to rates following the data report.

The question is whether the slowdown for the economy overshoots and ends up in a painful recession. That would carry the downside of not only causing layoffs across the economy but also weakening profits for companies, which would drag stock prices lower.

Tuesday’s report said the number of U.S. job openings at the end of April dropped to the lowest level since 2021. The numbers suggest a return to “a normal job market” following years full of strange numbers caused by the COVID-19 pandemic, according to Bill Adams, chief economist for Comerica Bank.

But it also followed a report on Monday that showed U.S. manufacturing contracted in May for the 18th time in 19 months. Worries about a slowing economy have hit the price of crude oil in particular this week, raising the possibility of less growth in demand for fuel.

A barrel of U.S. crude has dropped close to 5% this week and is roughly back to where it was four months ago. That sent oil-and-gas stocks to some of the market’s worst losses for a second straight day. Halliburton dropped 2.6%, and Exxon Mobil fell 2.3%.

Other companies whose profits tend to rise and fall with the cycle of the economy also fell to sharp losses, including steel makers and mining companies. It’s the second straight day such “cyclical” stocks have led the market lower.

Elsewhere on Wall Street, Bath & Body Works tumbled 12.5% despite topping expectations for revenue and profit in the latest quarter. Analysts called its forecast for results in the current quarter underwhelming.

Designer Brands, the owner of Designer Shoe Warehouse store chain, dropped 21.7% after its first-quarter profit came in below analyst forecasts.

GameStop also gave back some of its big gain from the day before, when euphoria broke out after a central character in the stock’s 2021 run returned to say he had built a stake in the video-game retailer. It dropped 3.9%.

On the winning side of Wall Street were dividend-paying stocks. They tend to benefit from lower interest rates because bonds paying lower yields can steer more income-seeking investors to real-estate investment trusts, utilities and other stocks that pay relatively high dividends.

Camden Property Trust, which offers multifamily housing around the country, rose 2.8% for one of the largest gains in the S&P 500. Public Storage gained 2.1%.

In the bond market, the yield on the 10-year Treasury slid to 4.33% from 4.39% late Monday and 4.50% late Friday. It had been above 4.60% recently.

The two-year yield, which more closely tracks expectations for the Fed, fell to 4.77% from 4.81%.

In stock markets abroad, India’s Sensex dropped 5.7% a day after jumping 3.4% following the country’s elections.

Indexes were mixed across the rest of Asia and lower across much of Europe.

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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

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