NEW YORK (AP) — Stocks are rising on Wall Street Wednesday, a day after the market’s worst performance in a month.
The S&P 500 rose 0.4% in morning trading following a 2.1% drop a day earlier. The Dow Jones Industrial Average rose 201 points, or 0.5%, to 41,135. The Nasdaq fell 0.4% as of 11:08 a.m. Eastern.
Job openings in the U.S. fell unexpectedly in July, a sign that hiring could cool in the coming months. The Labor Department reported that there were 7.7 million open jobs in July, down from 7.9 million in June and the fewest since January 2021. Openings have fallen steadily this year, from nearly 8.8 million in January. But overall, the report was mixed, with hiring having risen last month.
The employment market is being closely watched by investors and the Federal Reserve as a gauge of the economy’s strength. The job openings report hit Wall Street as traders anticipate that the Federal Reserve will start cutting its benchmark interest rate at its meeting later in September.
The central bank raised rates to a two-decade high in an effort to cool inflation. The rate of inflation has been steadily easing under the weight of the higher rates, while the broader economy has remained relatively strong. The Fed's goal was to tame inflation without stalling the economy into a recession. A weakening jobs market could raise concerns about slower economic growth ahead, but it could also mean less inflation pressure.
“Job vacancies declined, hires rose and quits were steady,” said Carl Weinberg and Rubeela Farooqi, economists at High Frequency Economics, in a note. “There is no signal here of any sudden collapse of the labor market here or any imminent recession.”
Several other reports this week will help give a clearer picture of the economy for the Fed and Wall Street.
The Institute for Supply Management will release its services sector index for August on Thursday. The services sector is the biggest component of the U.S. economy.
The U.S. will release its monthly jobs report for August on Friday. Economists polled by FactSet expect that report to show that the U.S. added 160,000 jobs, up from 114,000 in July and the unemployment rate edged lower to 4.2% from 4.3%. The report’s strength, or weakness, will likely influence the Fed’s plans for how it trims its benchmark interest rate.
Wall Street expects the central bank to begin trimming interest rates at its meeting later in September. Traders are forecasting that it will cut the benchmark rate by 1% by the end of 2024. Such a move would require it to cut the rate by more than the traditional quarter of a percentage point at one of its meetings in the next few months.
Dollar Tree slumped 19% after the discount retailer slashed its full-year earnings forecast. Hormel Foods fell 7.2% after the maker of Spam trimmed its revenue forecast for the year.
Department store operator Nordstrom was flat. Members of the Nordstrom family offered to take the company private for $3.76 billion per share cash, months after first expressing interest in a buyout.
In the bond market, the yield on the 10-year Treasury fell to 3.80% from 3.83% late Friday. That’s down from 4.70% in late April, a significant move for the bond market. The yield on the 2-year Treasury, which more closely tracks potential action from the Fed, fell to 3.80% from 3.87%.
Markets in Europe and Asia fell.
The mighty heft of Amazon is pulling the U.S. stock market higher. The S&P 500 rose 0.6% Friday, erasing some of its slump from the day before and pulling closer to its all-time high set on Tuesday. The index is on track to close a third straight winning week and a sixth straight winning month, which would be its longest monthly winning streak since 2021. The Dow Jones Industrial Average added 65 points, and the Nasdaq composite climbed 1.1%. Amazon led the way after delivering a much bigger profit than analysts expected. Treasury yields eased a bit in the bond market.
President Donald Trump said he has decided to lower his combined tariff rates on imports of Chinese goods to 47% after talks with Chinese leader Xi Jinping on curbing fentanyl trafficking.
The Federal Reserve cut its key interest rate Wednesday for a second time this year as it seeks to shore up economic growth and hiring even as inflation stays elevated. The move comes amid a fraught time for the central bank, with hiring sluggish and yet inflation stuck above the Fed’s 2% target. Compounding its challenges, the central bank is navigating without much of the economic data it typically relies on from the government. The Fed has signaled it may reduce its key rate again in December but the data drought raises the uncertainty around its next moves. Fed Chair Jerome Powell told reporters that there were “strongly differing views” at the central bank's policy meeting about to proceed going forward.
The Federal Reserve will almost certainly cut its key interest rate on Wednesday and could signal it expects another cut in December as the central bank seeks to bolster hiring. A cut Wednesday would be the second this year and could benefit consumers by bringing down borrowing costs for mortgages and auto loans. Since Fed chair Jerome Powell strongly signaled in late August that rate cuts were likely this year, the average 30-year mortgage rate has fallen to about 6.2% from 6.6%. Still, the Fed is navigating an unusual period for the U.S. economy and its future moves are harder to anticipate than is typically the case.
Stocks are rallying toward more records ahead of a week packed with potentially market-moving events. The S&P 500 rose 1% Monday. The Dow Jones Industrial Average added 224 points, and the Nasdaq composite jumped 1.7%. Stocks also climbed in Asia ahead of a meeting on Thursday between the heads of the United States and China. The hope is that the talks could clear rising tensions between the world’s two largest economies. This upcoming week will feature profit reports from some of Wall Street's most influential companies and a meeting by the Federal Reserve on interest rates. Gold fell back toward $4,000 per ounce.
U.S. and Chinese officials say a trade deal between the world’s two largest economies is drawing closer. The sides have reached an initial consensus for President Donald Trump and Chinese leader Xi Jinping to aim to finalize during their high-stakes meeting Thursday in South Korea. Any agreement would be a relief to international markets. Trump's treasury secretary says discussions with China yielded preliminary agreements to stop the precursor chemicals for fentanyl from coming into the United States. Scott Bessent also says Beijing would make “substantial” purchases of soybean and other agricultural products while putting off export controls on rare earth elements needed for advanced technologies.
