Dow Jones and S&P 500 drop after key jobs data shows a surprising recovery in openings

Communications Services (XLC), Healthcare (XLV) and Energy (XLE) led the sector action on Tuesday. Markets traded mixed as traders assessed new employment data and waited for more Fedspeak.

Oil prices stood out, with WTI crude (CL=F) rising 3% to trade above $70 a barrel. Brent crude (BZ=F), the international benchmark, also rose to just under $74 per barrel.

Industrials (XLI) were the biggest laggards of the day, driven by shares of Aflec (AFL), which fell 4% as investors faced a disappointing outlook. Financial services (XLF) and consumer staples (XLP) also fell.

The US economy is currently on solid footing. Economists at Bank of America expect this to remain the case until next year.

In a research note released to reporters on Monday, BofA’s economic team led by Claudio Irigoyen forecast that the US economy will grow at an annual rate of 2.4% in 2025, higher than current forecasts of 2% growth, according to the latest consensus estimates from Bloomberg.

This is despite uncertainties surrounding newly elected President Donald Trump’s economic policies, including campaign promises of tariffs on imported goods, tax cuts for businesses and curbs on immigration, which economists have viewed as inflationary.

Higher rates, coupled with an aggressive tariff policy, would strengthen the US dollar and create spillover effects on global financial conditions, which BofA said would represent “a major shock not only to the US economy but to the rest of the world.”

But there is one important caveat: The US is best prepared to weather any economic storm that follows Trump’s agenda.

“We like to say the US imports a lot of stuff, but no recessions,” Aditya Bhave, senior US economist at Bank of America, told Yahoo Finance in a separate press conference on Monday. “It just exports recessions.”

Read more here.

Job openings rose more than expected in October as investors continue to analyze the pace of the labor market slowdown in the second half of 2024, amid questions about how much further the Federal Reserve will cut interest rates in the coming year.

New data from the Bureau of Labor Statistics released Wednesday showed that there were 7.74 million open jobs at the end of October, up from 7.37 million in September.

The September figure was revised lower than the initially reported 7.44 million open jobs. Economists polled by Bloomberg expected Tuesday’s report to show 7.51 million job openings in October.

The Job Openings and Labor Turnover Survey (JOLTS) also showed that 5.31 million people were hired during the month, compared to 5.58 million people in September. The staff percentage fell from 3.5% in September to 3.3%. Also in Tuesday’s report: The quit rate, a sign of confidence among employees, rose to 2.1% from 1.9% in September.

Read more here.

U.S. stocks opened mostly higher on Tuesday, hovering near record highs.

The S&P 500 (^GSPC) and the tech-heavy Nasdaq Composite (^IXIC) each opened close to the flat and set new records for the two gauges. The Dow Jones Industrial Average (^DJI) rose about 0.1%.

Investors are bracing for a readout later on JOLTS job openings in October, the first in a wave of key data this week that culminates in Friday’s all-important monthly U.S. payrolls report.

There have been many analyzes out there about the CEO shake-up at Intel (INTC), but this is not a one-day story.

The path forward for Intel is critical for the country: its chip supply chain must be diversified beyond a single dependence on Taiwan Semiconductor (TSM).

But that path forward for Intel will be brutal at best.

Here are a few good points this morning from Evercore ISI analyst Mark Lipacis:

Below are some of my initial insights on Intel CEO Pat Gelsinger’s departure: