Stock Market News Today: Markets look for direction after JOLTS, Powell (SP500)

U.S. stocks on Tuesday moved higher after midday following a period of fluctuation, eventually ending in positive territory. Earlier, market participants digested some conflicting signals as strong labor market data countered dovish comments on inflation from Federal Reserve chair Jerome Powell.

Sentiment was helped by a ~10% surge in Tesla (TSLA) that saw the electric vehicle giant’s stock gain more than $68B in market value. The advance came after the Elon Musk-led firm beat consensus estimates on quarterly deliveries.

Wall Street’s three major averages have now kicked off H2 2024 with a two-day win streak. The tech-heavy Nasdaq Composite (COMP:IND) rose 0.84% to close above the 18,000 points level for the first time ever at 18,028.76. The benchmark S&P 500 (SP500) climbed 0.62% to settle above the 5,500 points mark for the first time ever at 5,509.01, while the blue-chip Dow (DJI) added 0.41% to finish at 39,331.85 points.

Of the 11 S&P sectors, nine ended in the green.

Shortly after the opening bell, Powell spoke at a panel at the European Central Bank’s (ECB) annual Forum on Central Banking in Sintra, Portugal. The central bank chief said U.S. inflation readings were showing signs of “resuming” a “disinflationary trend.” He also reiterated that policymakers still want more confidence that things were heading in the right direction.

Countering Powell’s dovish comments was the latest Job Openings and Labor Turnover Summary (JOLTS). According to the U.S. Bureau of Labor Statistics, job openings unexpectedly rose to 8.140M in May from April’s revised figure of 7.919M. Meanwhile, the quits rate held steady at 2.2% in May.

The JOLTS report, coming ahead of Friday’s nonfarm payrolls data, pointed to continued resilience in the labor market. That factor, along with inflation, has been one of the primary reasons for the Fed holding interest rates steady at a 23-year high and not gaining enough confidence yet to ease monetary policy.

Turning to the fixed-income markets, U.S. Treasury yields slipped slightly. The 30-year (US30Y) and 10-year yields (US10Y) were both down 3 basis points each to 4.60% and 4.43%, respectively. The shorter-end, more rate-sensitive 2-year yield (US2Y) was down 1 basis point to 4.75%. Notably, the yield curve between the US2Y and the US10Y has now narrowed to its tightest point in two months.

See how Treasury yields have done across the curve at the Seeking Alpha bond page.

“We are now in the heart of the summer, which tends to be a time when trading volumes decline. However, the economic and geopolitical landscapes remain highly volatile with the contentious U.S. election on the horizon, which could dramatically change policy initiatives. Wars in Ukraine and the Middle East and the bifurcation of the world’s nuclear powers remain factors that could cause sudden market volatility,” Andrew Hecht, investing group leader of Hecht Commodity Report, told Seeking Alpha.

“Meanwhile, the composite of commodity prices rose in Q2 and through the first six months of 2024. Ironically, inflation indicators have stabilized, but raw materials suggest that inflation remains a stubborn issue that could keep rates higher for longer. Be careful in markets across all asset classes, as the potential for sudden bouts of elevated price variance remains high,” Hecht added.