Highlights
Equities improved after a weak job openings report revived hopes for lower interest rates. The Dow Jones industrial average firmed 0.3 percent, the S&P 500 gained 0.7 percent and the Nasdaq rose 1.4 percent. US bond yields, the dollar and oil prices all declined.
The Labor Department's JOLTS report showed job openings declined much more than expected to a 7.6 million rate in December from 8.156 million in November, which suggested loosening in labor market tightness, the kind of easing the Federal Reserve has been hoping to see as it fights inflation. News on the trade front appeared more supportive for risk assets Tuesday after President Trump deferred immediate trade confrontation with Canada and Mexico, and investors hoped for similar treatment for China.
If widespread tariffs do go into effect and are sustained, the market seems to be coming around to the view that the trade duties are likely to have more of a deflationary effect by slowing growth than they would tend to raise inflation. That is reflected in lower bond yields since Trump ordered tariffs over the weekend.
Among sectors, best performers Tuesday included big technology shares, which helped the Nasdaq outperform. Other leaders included energy, media, airlines autos, transports, and industrial metals. Palantir was the day's featured winner after a better than expected quarter. Laggards included pharma, managed care, food, utilities, and aerospace & defense.
The Labor Department's JOLTS report showed job openings declined much more than expected to a 7.6 million rate in December from 8.156 million in November, which suggested loosening in labor market tightness, the kind of easing the Federal Reserve has been hoping to see as it fights inflation. News on the trade front appeared more supportive for risk assets Tuesday after President Trump deferred immediate trade confrontation with Canada and Mexico, and investors hoped for similar treatment for China.
If widespread tariffs do go into effect and are sustained, the market seems to be coming around to the view that the trade duties are likely to have more of a deflationary effect by slowing growth than they would tend to raise inflation. That is reflected in lower bond yields since Trump ordered tariffs over the weekend.
Among sectors, best performers Tuesday included big technology shares, which helped the Nasdaq outperform. Other leaders included energy, media, airlines autos, transports, and industrial metals. Palantir was the day's featured winner after a better than expected quarter. Laggards included pharma, managed care, food, utilities, and aerospace & defense.
Definition
Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.
Description
Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.
