June 5, 2024 – The Dow Jones Industrial Average experienced a rise on Tuesday as Wall Street navigated through an unstable start to the month, reflecting investor anticipation for upcoming economic reports.
The Dow climbed 140.26 points, or 0.36%, to close at 38,711.29. The S&P 500 saw a modest increase of 0.15%, ending the day at 5,291.34, while the Nasdaq Composite edged up 0.17% to 16,857.05. A notable decline in Treasury yields occurred, with the 10-year note rate falling approximately 7 basis points.
Despite the overall gains, some stocks held back the blue-chip index. Dow Inc., 3M, and Caterpillar each declined by more than 1%. Bath & Body Works was the weakest performer in the S&P 500, dropping nearly 13% due to disappointing financial guidance.
Investors are closely watching the nonfarm payrolls report for May, set to be released on Friday. The market is hoping for a labor market that is weak enough to prompt the Federal Reserve to consider cutting interest rates, but not so weak that it raises concerns about a potential recession.
“Right now, the market is looking for a catalyst,” stated Megan Horneman, Chief Investment Officer at Verdence Capital Advisors, which manages over $3 billion in assets. “There’s going to come a point where the bad news is actually bad news.”
Tuesday’s session also included a new reading on the jobs market. The Labor Department reported 8.059 million job vacancies in April, the lowest level in over three years and below the Dow Jones estimate of 8.4 million openings. This data has led traders to increase their expectations for two rate cuts this year to nearly 62%, up from around 36% a week ago, as per the CME FedWatch Tool.
However, Horneman expressed skepticism about a rate cut this year, citing persistent inflation, particularly in the services sector. She predicted that the broader market would likely remain stagnant until more clarity is provided by the jobs report.
Tuesday’s upward movement follows a mixed performance on Monday, when the Dow fell more than 115 points, or 0.3%, on the first trading day of June. Meanwhile, the S&P 500 and Nasdaq Composite saw slight gains, despite weak manufacturing data impacting market sentiment.
