Stock Market Performance
On Tuesday, the S&P 500 Index ($SPX) closed up by +0.27%. The Dow Jones Industrials Index ($DOWI) increased by +0.43%, while the Nasdaq 100 Index ($IUXX) rose by +0.33%. E-mini S&P futures for September (ESU25) gained +0.28%, and September E-mini Nasdaq futures (NQU25) increased by +0.36%.
Payroll Revisions Affecting Market Sentiment
Stock indexes moved higher on Tuesday after a preliminary revision to U.S. payrolls through March revealed fewer jobs than initially reported. This finding boosted expectations of quicker interest rate cuts by the Federal Reserve. Market sentiment is supported by the likelihood of a more accommodative Fed, with traders fully anticipating a 25 basis point rate cut at next week’s FOMC meeting, and a 10% chance for a 50 basis point cut.
Mergers and Acquisitions Supporting Stock Prices
Merger and acquisition activity also provided a boost to stocks as Anglo American announced its acquisition of Teck Resources, thereby forming a company valued at over $50 billion. Additionally, Novartis AG is set to acquire Tourmaline Bio for approximately $1.4 billion.
Labor Market Insights
The recent payroll revisions indicated a loss of -911,000 jobs, more than the expected -700,000 and reflecting the most significant downward adjustment in job growth since 2000, signaling a weakening labor market in the U.S.
Upcoming Economic Indicators
This week, the market’s focus will shift to any trade or tariff developments. On Wednesday, the August PPI final demand is projected to increase by +3.3% year-on-year, while the August PPI excluding food and energy is expected to ease slightly to +3.5% year-on-year. On Thursday, August CPI is anticipated to rise to +2.9% year-on-year. Moreover, initial unemployment claims are forecasted to decrease by -3,000 to 234,000.
Interest Rates Trends
The December 10-year T-notes (ZNZ5) closed down -6.5 ticks on Tuesday, with yields climbing +3.0 basis points to 4.070%. The strength in stocks reduced demand for safe-haven T-notes, while upcoming Treasury auctions contribute to supply pressures.
Noteworthy Stock Movements
UnitedHealth Group (UNH) saw a surge of over +8%, leading gains in the S&P 500 and Dow after announcing that most of its Medicare Advantage members will be enrolled in highly rated plans next year. Conversely, Humana (HUM) declined over -12% due to concerns over Medicare quality rating changes.
