The big three indexes all hit closing highs on the same day for the first time this year on Tuesday after Wall Street looked past the latest sign the labor market has been weaker than previously thought.
The Dow Jones Industrial Average rose 197 points, or 0.4%. The S&P 500 was up 0.3%. The Nasdaq Composite was up 0.4%.
The Dow, with a big boost from UnitedHealth and Goldman Sachs this afternoon, marked its third record close of the year, while the S&P and Nasdaq each hit their 22nd closing highs this year.
The yield on the 2-year Treasury note rose to 3.54%, while the 10-year yield was up to 4.07%.
The big economic news of the day was from the Bureau of Labor Statistics, which marked down nonfarm payroll gains by 911,000 jobs in the 12 months through March. The move knocked jobs added to 847,000 from 1.8 million.
Rosenberg Research’s David Rosenberg notes that in the past three years, initial monthly jobs numbers have been overstated by 2 million. Wall Street has been paying extra attention to revisions following President Donald Trump’s firing of BLS Commissioner Erika McEntarfer.
“In contrast to the constant complaints coming out of the White House, this is not about how inadequate the BLS is when it comes to estimating the monthly data, or that it is in desperate need of AI tools, but rather the vagaries involved in having to do this exercise immediately and accurately given all the economic distortions in recent years caused by the pandemic and the incredible shifts we have seen in immigration flows,” Rosenberg says.
The BLS will be Wall Street’s focus this week, with the producer price index and the consumer price index due out on Wednesday, and Thursday, respectively.
“While this week’s Producer Price Index (PPI) and Consumer Price Index (CPI) reports could surprise the market, it’s highly unlikely they’ll alter the Powell Fed’s decision at this point,” writes Bespoke Investment Group co-founder Paul Hickey.
Odds of a rate cut next week are 100%, with traders putting an 8.2% chance on a larger half-point cut compared to 91.8% for a quarter-point cut, according to the CME FedWatch Tool.