NEW YORK (AP) — Stocks were relatively stable on Tuesday as Wall Street calmed down following a turbulent swing in March.
The S&P 500 was virtually unchanged in early trading. The Dow Jones Industrial Average is down 44 points, or 0.1%, at 33,556 as of 9:50 a.m. ET, while the Nasdaq Composite is down 0.1%.
Both the stock and bond markets have stabilized after sharp turnarounds in the first three months of the year. While many big issues still weigh heavily on Wall Street, the worst fears caused by the second-largest and his third-largest U.S. bank failures in history have come after strong action by regulators around the world. weakened.
Investors are still divided over whether the U.S. economy will go into recession and how much corporate profits will fall. The biggest question is what to do with interest rates next after the Federal Reserve (Fed) hiked interest rates furiously last year to keep high inflation in check.
A report due late in the morning could give the Fed further guidance on whether to raise rates again at its next meeting in May or keep rates on hold for the first time in over a year. Shows the number of jobs advertised nationwide by employers in February.
Fed officials say the numbers are significant. That’s because a softening Fed could take some of the pressure off slowing but still too high inflation. Economists expect job openings to slow slightly.
Higher interest rates can slow the economy and keep inflation under control, but they increase the risk of a recession. It also affects the prices of stocks, bonds and other investments.
Tuesday will be the first of three reports on the US job market this week. A weekly report will be released on Thursday showing how many workers have filed for unemployment benefits. And on Friday comes a more significant monthly update on the number of jobs created across the country.
More encouraging data on inflation came Tuesday from the rest of the world. In Europe, a European Central Bank survey showed that inflation expectations for the next year are falling among consumers in the region. This is important because lower expectations help the economy avoid a vicious circle where inflation continues to gain momentum.
Another report showed regional wholesale-level inflation softened more than economists expected in February.
In Australia, the central bank of the country We did not change the main interest rate to 3.60%. The firm said it needs time to see how past rate hikes are working through the system.
Australia’s economy is much smaller than that of the US or the European Union, but the Australian and New Zealand central banks tend to “set the tone of the monetary policy cycle,” said Swissquote.com’s Ipek Ozkardeskaya. mentioned in the comments.
In South Korea, consumer price inflation fell below expectations in March to 4.2% a year earlier, down from 4.8% the previous month. This raises hopes that the central bank will keep the key rate at his 3.5% at next week’s meeting.
In the US, traders are divided on whether the Fed will keep rates on hold or raise them again at its next meeting in May. But there seems to be growing confidence that the Fed will be forced to cut rates later this year.
This has helped boost stocks, especially technology companies and other high-growth companies, as rate cuts tend to act like steroids for markets. But the Fed has consistently said it does not expect a rate cut this year.
Critics are also skeptical, saying inflation is still too high for the Fed’s liking. Also, rate cuts are likely only to come when the economy is in a much weaker state, which could also cause stocks to plummet.
In the bond market, 10-year government bond yields rose to 3.46% from 3.42% late Monday. Helps set interest rates for mortgages and other important loans.
The 2-year Treasury, driven by expectations for the US Federal Reserve, rose to 3.99% from 3.97%.
Oil prices also rose further the day after rising on concerns about tight supplies. Saudi Arabia and other oil producers announced over the weekend that they would cut production from May.
Benchmark US crude rose 1.1% to $81.29 a barrel. International benchmark Brent crude rose 0.9% to $85.73 a barrel.
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Contributed by AP Business Writers Elaine Kurtenbach and Matt Ott.
