Check back for live updates throughout the trading day.
U.S. stocks closed lower Tuesday even as the first of a series of key labor market reports triggered a pullback in Treasury yields that could build on the market's theory that the Federal Reserve will lower its benchmark interest rate early next year.
MANDEL NGAN/AFP via Getty Images
Updated at 4:03 PM EST
Tech edges higher
Tech stocks held onto earlier gains, powered by a four-month high for Apple, to close 0.28% higher on the session at 14,255.21 points. The S&P 500, meanwhile, was essentially flat at 4,566.07 points, down just 0.06% for the day, while the Dow closed 80 points lower at 36,124.26 points.
Updated at 1:05 PM EST
Cut and dried
Traders are betting the Fed will make its first rate cut in March, around nine months after its last increase in July that lifted the Fed Funds rate to between 5.25% and 5.5%, following a big decline in October job openings that could be the precursor to a softer labor market in the months ahead.
The CME Group's FedWatch is pricing in a 57.1% chance of a quarter point cut in March, up from just 25.5% a month ago, with the odds of a May reduction pegged at around 90%.
Stocks are still mixed, however, with the S&P 500 down 4 points, or 0.1%, and the Dow down 100 points. The Nasdaq is holding onto earlier gains and was last marked 14 points higher, or 0.1%.
Tech check
The Nasdaq is the lone major benchmark in the green in mid-day trading, with big cap stocks getting a boost from the pullback in Treasury yields and solid gains for Apple.
The tech-focused benchmark was up 18 points, or 0.13%, while the S&P 500 was down 7 points and the Dow fell 140 points.
Benchmark 10-year note yields were last pegged at 4.178%, down near 13 basis points from Monday levels, while 2-year notes were pegged at 4.612%.
Today's stock market is literally the Mag 7 and almost nothing else pic.twitter.com/UKffDEGFtc
— Brian Sullivan (@SullyCNBC) December 5, 2023
Updated at 11:30 AM EST
The Apple and the Fox
Apple (AAPL) -) is one of the market's key movers Tuesday, rising 2.2% and hitting a new four-month high, following a rosy near-term sales outlook from iPhone assembler Foxconn.
Related: Apple at 4-month high as iPhone assembler Foxconn boosts sales outlook
Updated at 10:22 AM EST
Jolted by Jolts
Stocks are getting a boost from a pullback in Treasury yields and some soft jobs data, which showed the number of open positions in October fell to an 18-month low of 8.7 million, removing a significant level of wage pressures from near-term inflation forecasts.
The Nasdaq was marked 0.44% higher in early trading, paced by big moves higher in mega-cap tech stocks, while the S&P 500 pared its opening bell decline and was last trading flat on the session.
Related: American workers holding out for wage hikes just got a nasty surprise
Updated at 9:20 AM EST
Streamlined CVS
CVS Health (CVS) -) shares are getting a firm early boost, rising 2.5% and potentially lifting the stock into positive territory for the past six months, after unveiling plans to combine its Heath Services division under one new brand, lifting its quarterly dividend and issuing a solid 2024 sales forecast ahead of an investor day presentation.
Related: CVS Health higher on dividend boost and solid 2024 revenue forecast
Updated at 8:19 AM EST
ECB doves, Treasury bond bulls
The European Central Bank's Isabel Schnabel, who sits on its influential Executive Board, gave a dovish assessment on rates and inflation during an interview with Reuters Tuesday that is having a big impact on U.S. Treasury yields.
Schnabel, citing "remarkable" progress on inflation, indicated the ECB was done raising rates, adding to bets on both an early spring cut that are also being made here in the U.S.
Benchmark 10-year Treasury note yields were last marked 8 basis points lower from Monday's closing levels at 4.228% in early New York trading, while 2-year notes eased to 4.624%.
Updated at 7:33 AM EST
Grand Leak Online
Take-Two Interactive (TTWO) -) shares are a notable early mover, falling more than 4% in pre-market trading, after the video game maker was forced into the early release of a trailer hyping its new Grand Theft Auto VI title after it was leaked online for a second time.
Related: Take-Two releases Grand Theft Auto VI trailer following online leak
Stock Market Today
Investor sentiment, which was rattled by Monday's sharp move higher in Treasury bond yields, took another hit overnight. That's when Moody's Investors Service lowered its outlook on China's A1 credit rating, citing risks liked to property and local government debt alongside "persistently lower medium-term economic growth."
The decision tipped China shares sharply lower, with the benchmark CSI 300 falling 1.9% to the lowest level in nearly five years. The move underscored concern that a fading recovery in the world's second-largest economy could increase the risk of a global slowdown in the coming year.
The MSCI World Index, the broadest measure of global stocks, fell 0.43% from a four-month high in overnight trading. But stocks in Europe found support through dovish rate comments from European Central Bank official Isabel Schnabel.
Speaking with Reuters, Schnabel said another rate hike in the region was "unlikely" given cooling inflation prospects, cementing the case for a March reduction in the bank's main deposit rate.
Her comments also pulled benchmark German 10-year bond yields to an early June low of 2.28%, helping 10-year Treasury yields retrace some of yesterday's rise to trade at 4.243% in the early New York session.
The regionwide Stoxx 600 index was last seen 0.1% lower on the session in early Frankfurt trading while Britain's FTSE 100 was marked 0.66% lower in London.
In the U.S., markets are likely to key on the first of three closely watched labor-market data reports over the next four days. The October Jolts report, a measure of quit rates and unfilled positions for the month of October, is due at 10 a.m. U.S. Eastern time.
Look today for the first of this week's three data insights on the state of the US labor market.
— Mohamed A. El-Erian (@elerianm) December 5, 2023
Bloomberg is looking for the JOLTS report to show a slight cooling of the labor market as
Job vacancies fall from 9.55 million in October to 9.34 million;
The… pic.twitter.com/fsPQ6arcX4
On Wall Street, futures contracts tied to the S&P 500 are indicating a 17 point opening-bell decline while those linked to the Dow Jones Industrial Average are suggesting a 72 point pullback.
The Nasdaq, which fell 120 points on Monday amid a broader retreat for megacap tech stocks, is called 80 points lower.
In other markets, global oil prices edged higher in the overnight session as officials from Saudi Arabia attempted to talk up their commitment to recently agreed OPEC production cuts. But gains were limited amid concern for the level of near-term demand from China.
Brent crude contracts for February delivery, the global benchmark, were marked 34 cents higher at $78.38 per barrel. WTI futures contracts for January were up 42 cents at $73.46 per barrel.
- Action Alerts PLUS offers expert portfolio guidance to help you make informed investing decisions. Sign up now.
