Stocks Rise, Yields Fall as New Data Shows Cooling Labor Market

• U.S. stocks ended higher while 10-year Treasuries fell on Tuesday.

• Tuesday’s JOLTS report showed job postings hitting their lowest level in more than three years.

• This eases pressure on the Fed to keep rates high.

Averages for major U.S. stocks closed Tuesday as investors priced in the latest signs of a slowing economy and bet on the increased likelihood of rate hikes later this year.

The JOLTS report released Tuesday by the Bureau of Labor Statistics shows that job openings in the United States fell to their lowest level in more than three years, reaching 8.059 million vacancies in April.

This reinforces expectations that the Federal Reserve will cut interest rates, with futures markets now price higher odds for a political pivot in September.

The labor slowdown also extended the Treasury rally, with yields on benchmark 10-year bonds falling more than seven basis points.

“When the labor market was hot in 2022, Fed officials were beginning to worry that wage and price pressures would cause inflation to accelerate out of control,” said Comerica chief economist, Bill Adams. “Most labor indicators now point to a considerably colder labor market. That’s why Chairman Powell reacted without hesitation when inflation accelerated in the first half of the year, saying that further hikes in rates would “interest was unlikely.”

More employment data is expected on Friday, when the much-anticipated payroll figures for May will be released. Consensus estimates call for 178,000 jobs to be created that month, consistent with April’s figures.

According to Bank of America, a range between 125,000 and 175,000 would be the optimal range, which indicates continued strength without the need to keep interest rates high for longer. The bank said a result in this range would be a catalyst for further stock market gains.

Here is where the American indices stood at the 4:00 p.m. close on Tuesday:

Here’s what happened today:

The story continues

In commodities, bonds and cryptocurrencies:

• West Texas Intermediate Crude oil fell 1.2% to $73.3 a barrel. Brent crudethe international benchmark, rose slightly by 0.4% to $77.62 per barrel.

• Gold fell 1.02% to $2,326 an ounce.

• The 10-year Treasury yield fell seven basis points to 4.33%.

• Bitcoin rose 2.8% to $70,738.

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