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US stocks struggled on Wednesday, closing mixed as investors capitalised on disappointing job openings.
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There were 7.67 million job openings in July, the lowest number in more than three years.
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According to the CME FedWatch tool, traders expect the likelihood of significant rate cuts toward the end of the year to increase.
U.S. stocks continued to fall on Wednesday as traders digested more weak jobs data, stoking fears about the strength of the U.S. economy. All three benchmark indexes fell, while bond yields fell.
The economy had fewer job openings than expected in July, with employers posting 7.67 million open positions at the end of the month, according to the Bureau of Labor Statistics. That’s down from 7.91 openings recorded in June and the lowest number of available jobs in more than three years.
The new job postings data added to fears of a slowing economy that were stoked by Tuesday’s manufacturing numbers. Yields fell Wednesday, extending declines in key government bond yields from the previous session. The yield on the 10-year Treasury note fell eight basis points to 3.761%.
“In further evidence of a slowing U.S. labor market, employment signals fell to their meagerest level in 42 months,” José Torres, a senior economist at Interactive Brokers, said in a note. “The reading, the weakest since January 2021, raises optimism that the Fed will provide liquidity relief, but such exuberance is offset by pessimism about economic growth.”
“As Chairman Jerome Powell recently said, further cooling in the labor market is unwelcome. But that is exactly what the JOLTS update conveys,” Mark Hamrick, a senior economic analyst at Bankrate, said in a note.
Fears of a recession could be further heightened by a weak jobs report on Friday. Economists expect the U.S. added 162,000 jobs last month, which would lower the unemployment rate to 4.2%.
Investors, meanwhile, have been ramping up expectations for aggressive rate cuts by year-end. Markets are pricing in an 86% chance the Fed will cut rates by 100 basis points or more by year-end, up from just 72% on Tuesday, according to the CME FedWatch tool.
This was the position of the US indices at the closing bell at 4:00 p.m. on Wednesday:
Here’s what else is going on:
In commodities, bonds and crypto:
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Oil futures fell. West Texas Intermediate crude fell 2% to $68.88 a barrel. Brent crude, the international benchmark, fell 1.9% to $72.38 a barrel.
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Gold remained virtually flat at $2,523.70 an ounce.
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The 10-year US Treasury yield fell eight basis points to 3.761%.
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Bitcoin was traded at $58,047.
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