Stocks rose on Tuesday, gaining momentum as fresh data showed signs of a slowdown in the labor market ahead of the August jobs report on Friday.
The S&P 500 (^GSPC) rose 1.2% and the Dow Jones Industrial Average (^DJI) rose 0.65% after US employment fell below 9 million for the first time since March 2021 and consumer confidence reversed its summer gains. The Nasdaq Composite Index (^IXIC) led the gains around 12:30 EST, up 1.6%.
Earlier Tuesday, the Standard & Poor’s Case-Shiller US National Composite Index of home prices rose 0.7% in June compared to May on a seasonally adjusted basis. This was in line with an increase of 0.7% in the previous month. The index is still only 0.02% below its all-time high exactly a year ago.
The economic updates are an appetizer for the headline PCE inflation report and the August payroll reports due Thursday and Friday.
Although the issue of recession is still on the forefront of investors’ minds, the strength of this data could influence investors’ expectations for further interest rate hikes by the Fed. The dovish tone of Federal Reserve Chairman Jerome Powell’s speech in Jackson Hole last week left some policymakers unconvinced that they wouldn’t take more action to quell inflation.
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