US stocks plunged and oil prices fell amid two key data: the JOLTS job openings survey, which showed a weakening job market, and factory orders data.
Checking with the indices around 12:05 pm ET, the S&P 500 (^GSPC) decreased by almost 0.7% and the Dow Jones Industrial Average (^DJI) fell 0.78%. The Nasdaq High Tech Composite (^IXIC) slipped 0.54%
Oil prices fell, with WTI Crude Oil, the US benchmark, trading below $80 a barrel. Oil returned to its four-month trading range after OPEC+ announced it would cut production by 1.16 million barrels per day.
On the economic front, job openings at US employers fell to 9.93 million from 10.5 million, less than expected. On the other hand, resignations increased and dismissals decreased, data from the It showed the Bureau of Labor Statistics. Separately, factory orders fell 0.3%, also below expectations.
Bond yields fell after the data was released. The yield on the benchmark 10-year US Treasury note fell to 3.35% on Tuesday.
The S&P 500 closed up 0.4% on Monday. The biggest laggard was the Nasdaq 100, which fell 0.27%. Bond yields fell as manufacturing activity plunged to the lowest level since May 2020, indicating further declines could follow as credit conditions tighten.
Meanwhile, Federal Reserve Bank of St. Louis President James Bullard said Monday that continued strength in the labor market gives the Fed room to combat inflation. Bullard also commented on OPEC’s decision to cut production, suggesting it could make the Fed’s job of reducing inflation more challenging as oil prices rise.
Separately, Federal Reserve Governor Lisa Cook also highlighted the continued tightness in the job market.
“We’re still going to see inflation from that, but we’ve seen wage gains moderate quite a bit,” he said.
Still, the Federal Reserve has stuck with inflation as its main concern, even amid recent banking turmoil that has shown signs of relief.
“The expected Fed rate for the next meeting was mostly flat against this backdrop, rising a modest 1.6 basis points to 4.973% with a discounted 63% probability for a 25 basis point hike next month,” Jim Reid and his colleagues at Deutsche Bank wrote in a note to clients.
However, the recent banking woes sparked by the failures of Silicon Valley Bank and Signature Bank “are not over yet,” JPMorgan Chase Chief Executive Jamie Dimon said Tuesday.
In his closely watched annual shareholder letter, Dimon outlined the damage from financial system turmoil on all banks and urged lawmakers not to “overreact” with more regulation.
Elsewhere, Credit Suisse Chairman Axel Lehmann has apologized for the bank’s failure to save the institution as the company had been draining deposits for months.
Meanwhile, in the current context, the rally in stocks is likely to falter due to recent bank failures. The oil surprise and a slowdown in growth could send stocks back to their low levels seen in 2022, JPMorgan strategist Marko Kolanovic said.
In individual stock moves, shares of AMC Entertainment Holdings (AMC) plunged Tuesday after a deal would allow AMC to convert APE preferred shares into AMC common shares.
And Disney’s feud with Florida Governor Ron DeSantis escalated. Executive Director Bob Iger called the governor’s retaliation “anti-business” and “anti-Florida.” Shares of Disney (DIS) were lower on Tuesday.
Virgin Orbit Holdings, Inc. (VORB) shares plunged after the company filed for bankruptcy Monday night after laying off around 85% of its staff in March.
C3.ai, Inc. (AI) shares fell about 24% on Tuesday after Kerrisdale Capital, a company that is short AI shares, said it sent a letter to the software maker’s auditor.
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Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
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