Wall Street’s main indexes exhibited a lackluster performance on Tuesday, following a session where they had come close to record highs. The subdued trading atmosphere was exacerbated by a downward revision in payroll numbers, which reinforced market speculation regarding potential interest rate cuts by the Federal Reserve.
Recent government figures indicated that the U.S. economy likely created approximately 911,000 fewer jobs over the twelve months ending in March than previously estimated. This adjustment underlines concerns that job growth has been stalling even before the implementation of President Donald Trump’s aggressive tariffs on imports.
Markets currently reflect a strong sentiment favoring a 25 basis point rate cut, already priced in by investors. However, expectations for a larger, 50 basis point reduction remain considerably lower, hovering around 8.2%, according to the CME’s FedWatch tool. Labor market data from July and August has already raised alarms for both investors and Federal Reserve officials regarding weakening job conditions.
“Investors are hoping that each one of these individual data points will add up to a consistent picture that will support the Fed in cutting rates,” commented Peter Andersen, founder of Andersen Capital Management. He added, “The market is getting set up to have a tremendous disappointment if the Fed doesn’t take action.”
As of midday, the Dow Jones Industrial Average registered a modest rise of 41.99 points, or 0.09%, reaching 45,556.94. In contrast, the S&P 500 saw a slight dip of 2.52 points, or 0.04%, to settle at 6,492.63, while the Nasdaq Composite fell by 12.99 points, or 0.06%, to 21,785.71.
The geopolitical climate also played a role in market fluctuations, particularly as Israel conducted an attack on Hamas leaders in Doha, Qatar. This escalation in conflict led to a rise in oil prices, contributing to a 1.1% increase in the energy sector.
In corporate news, shares of UnitedHealth climbed 6.7% after the health insurer indicated it anticipates enrollment in its well-regarded Medicare insurance plans to meet its projections, providing much-needed support for the Dow. Conversely, the Philadelphia Housing Index fell by 3.1% after four consecutive sessions of gains.
Investor attention will turn toward upcoming economic indicators, with a producer inflation report expected on Wednesday and consumer prices data set to release on Thursday. These figures will be scrutinized to assess the ramifications of Trump’s tariff strategies and to evaluate the possibility of a larger rate cut being justified.
Despite the day’s sluggish start, Wall Street experienced a buoyant beginning to September. Historically, this month poses challenges for U.S. equities, with average losses of 1.5% since 2000, according to data from LSEG.
In other notable stock movements, Nebius surged nearly 43.6% after announcing a substantial $17.4 billion partnership with Microsoft, while rival CoreWeave saw a 4.2% increase. Meanwhile, shares of Fox Corp and News Corp saw declines of 6% and 3.4%, respectively, following an agreement that allows Lachlan Murdoch to gain control over the family media empire.
Albemarle emerged as the biggest decliner on the S&P 500, plummeting 11.3% amid easing supply concerns after CATL, a Chinese battery giant, signaled plans to resume production at a lithium mine.
The market will also be awaiting quarterly results from cloud service provider Oracle, with expectations that these will provide further insights into the demand for artificial intelligence across the technology sector. Overall, the day saw 15 new 52-week highs and no new lows for the S&P 500, while the Nasdaq Composite recorded 75 new highs and 55 new lows. Declining stocks outnumbered advancing ones, showcasing a 1.78-to-1 ratio on the NYSE and a 1.59-to-1 ratio on the Nasdaq.
