Wall Street mixed as traders assess economic data

New York, The Gulf Observer: Wall Street’s main indexes were mixed on Tuesday as investors assessed a fresh batch of economic data, including a jobs report, to gauge the probability of rate cuts by the Federal Reserve early next year, while megacap stocks rebounded from the previous day’s losses.

U.S. job openings dropped in October to the lowest level since early 2021, indicating that the labor market was easing, while U.S. services sector activity picked up in November.

“The data is better than expected, meaning that the job market is weaker, but it’s not so weak that it requires maybe a Fed rate cut or a jeopardy of a recession,” said Paul Nolte, senior wealth adviser and market strategist at Murphy & Sylvest.

“And it’s certainly not strong enough to say the Fed is going to need to raise rates.”

After a strong run of gains in November that sent the S&P 500 to its closing high for the year, U.S. equities pulled back in the previous session as Treasury yields rose.

A majority of traders believe the Fed may have reached the end of its tightening campaign, given that inflation is easing, and have nearly fully priced in the possibility that the central bank will keep rates unchanged next week.

They are also betting on lower interest rates next year, with 65% pricing in a rate cut of at least 25 basis points in March and 89% in May, 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 labor market.