The Dow Jones Industrial Average was higher Tuesday as Wall Street looked to find its footing after an uneven start to the month.
The 30-stock Dow added 197 points, or 0.5%. The S&P 500 gained 0.2%, while the Nasdaq Composite climbed 0.2%. Treasury yields were notably lower, with the benchmark 10-year slipping about 6 basis points.
Dow Inc., 3M and Caterpillar fell roughly 1%, keeping gains for the Dow in check. Bath & Body Works was the worst-performing stock in the S&P 500, losing 13% on the back of disappointing guidance.
Wall Street is gearing its focus toward the crucial nonfarm payrolls report for May on Friday. Investors want a labor market that is weak enough to allow the central bank to cut interest rates, but not so weak that it spurs worry over a potential recession.
“Right now, the market is looking for a catalyst,” said Megan Horneman, chief investment officer at Verdence Capital Advisors, which manages more than $3 billion in assets. “There’s going to come a point where the bad news is actually bad news.”
Investors also parsed the latest reading on the state of the jobs market. Employment data from the Labor Department showed 8.059 million vacancies in April, the lowest level in more than three years. An estimate from Dow Jones called for 8.4 million openings.
But Horneman cast doubt over the likelihood of an interest rate cut this year from the Fed due to inflation, and particularly price pressures in the services sector, remaining sticky. She noted that the broader market will likely “stay pretty sideways” until more insight is drawn from the jobs report.
Tuesday’s market move comes one day after the Dow fell more than 115 points, or 0.3%, on the first trading day of June. The S&P 500 and Nasdaq Composite both rose modestly on Monday as weak manufacturing data weighed on market sentiment.
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