Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, September 28, 2023.
Brendan McDermid | Reuters
Stock futures are near flat Tuesday night following a tough session that dragged the Dow Jones Industrial Average into negative territory for 2023.
The moves follows a losing session on Wall Street after job openings data indicated the labor market is still strong and bond yields marched higher. The Dow lost 1.3%, notching its worst session since March. The S&P 500 tumbled 1.4% and at one point hit its lowest level since June. The Nasdaq Composite ended 1.9% lower.
Those losses pulled the Dow into the red on the year: It’s now off 0.4%. The S&P 500 and Nasdaq are up more than 10% and 24%, respectively, for 2023.
“Interest rates are the primary driver of equity performance today and have been for the better part of two months,” said Ross Mayfield, investment strategy analyst at Baird.
The August job openings survey, issued Tuesday, showed 9.6 million vacancies in the month, notably higher than the consensus estimate of 8.8 million from economists polled by Dow Jones. That indication of continued strength in the labor market concerned investors hoping the Federal Reserve is near the end of its interest rate-hiking cycle.
“The surprise increase in job openings comes at an unwelcome time where markets are hoping for data that eases the Fed’s inflation concerns,” said Yung-Yu Ma, chief investment officer of BMO Wealth Management. “It’s a classic ‘good news is bad news’ because the potential impact of higher interest rates on both the economy and markets is becoming concerning.”
The labor market remains a focus of investors through the end of the week. Before the all-important jobs data due Friday, investors will parse private payroll data from ADP due Wednesday before the bell and the weekly jobless claims report expected Thursday.
Traders will also watch for economic data on purchasing and housing orders slated for Wednesday.
Investors will also follow the latest out of Washington. The House of Representatives removed Republican Kevin McCarthy as speaker on Tuesday, marking the first time in history the legislative chamber ousted its leader in a no-confidence vote.