The US stock market saw gains on Tuesday driven by weaker-than-expected jobs data, leading to optimism for potential rate cuts by the Federal Reserve later in the year. All three major indexes closed higher, with the Dow Jones Industrial Average up 0.4%, the Nasdaq climbing 0.2%, and the S&P 500 gaining 0.2%.
The Dow Jones Industrial Average rose by 140.26 points to close at 38,711.29, with 21 out of 30 components ending in positive territory. The tech-heavy Nasdaq closed at 16,857.05, up 28.38 points, while the S&P 500 ended at 5,291.34, gaining 7.94 points. Among the sectors, Real Estate, Consumer Staples, Communication Services, and Health Care saw gains.
Job openings in the US fell in April, indicating a softer labor market that could help the Federal Reserve manage inflation. The Bureau of Labor Statistics reported a decrease of 296,000 job openings to 8.059 million, the lowest since February 2021. Most industries saw declines in job openings, except for services, private education, retail, finance, insurance, and transportation.
Market participants are awaiting the May jobs report for further insights into the unemployment rate, with speculation about potential interest rate cuts in September and December. Economic data showed a 0.7% increase in new orders for manufactured goods in April, with durable goods up 0.6% and nondurable goods up 0.8%.
Overall, the market remains optimistic about potential rate cuts by the Federal Reserve, driven by softer job market data and economic indicators showing mixed results.