US stocks were mixed on Tuesday morning, while oil prices rose ahead of two key data: the JOLTS jobs survey and factory orders data.
S&P 500 (^GSPC) Gained 0.1% And the Dow Jones Industrial Average (^DJI) ticked down near the flatline. Technology-heavy Nasdaq Composite (^IXIC) 0.2% added.
Oil prices rose as WTI crude – the US benchmark – traded above $81 a barrel. Oil has now returned to its four-month trading range after OPEC+ announced a production cut of 1.16 million barrels per day.
The S&P 500 rose 0.4% on Monday. The biggest loser was the Nasdaq 100, which fell 0.27%. Manufacturing activity fell to the lowest level since May 2020, indicating that further declines are likely as credit conditions tighten.
Meanwhile, Federal Reserve Bank of St. Louis President James Bullard said Monday that continued strength in the labor market gives the central bank room to fight inflation. Bullard also commented on OPEC’s decision to cut production, suggesting it could make the central bank’s job of keeping inflation down as oil prices rise more challenging.
Separately, Federal Reserve Governor Lisa Cook highlighted continued tightness in the labor market.
“We’re still going to see inflation come out of that, but we’ve seen wage gains slow down a little bit,” he said.
However, the Federal Reserve has stuck with inflation as its main concern, even amid recent banking turmoil that has shown signs of easing.
“The expected Fed rate next meeting is largely flat against this backdrop, rising a modest 1.6 basis-points to 4.973%, with a 63% chance of a 25 basis-point hike next month,” Jim Reid and colleagues at Deutsche wrote in a note to bank clients.
Still, the recent banking woes fueled by the failures of Silicon Valley Bank and Signature Bank are “not over yet,” JP Morgan Chase CEO Jamie Dimon said Tuesday.
His closely observed year Letter to Shareholders, Dimon outlined the damages of financial system turmoil on all banks and urged lawmakers not to “overreact” with more regulations.
Elsewhere, Credit Suisse chairman Axel Lehmann apologized for the bank’s failure to save the company as it drained deposits for months.
Meanwhile, against the current backdrop, the bullishness of stocks may waver considering the recent bank failures. An oil surprise and a slowdown in growth could send stocks back to the lows seen in 2022, said JP Morgan strategist Marko Kolanovic.
In single-stock moves, shares of AMC Entertainment Holdings ( AMC ) fell on Tuesday morning.
Disney’s feud with Florida Governor Ron DeSantis escalated. CEO Bob Iger called the governor’s response “anti-business” and “anti-Florida.” Shares of Disney ( DIS ) rose Tuesday morning.
Virgin Orbit Holdings, Inc. ( VORB ) shares fell after it filed for bankruptcy late Monday after roughly 85% of its employees were laid off in March.
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Danny Romero is a Yahoo Finance reporter. Follow her on Twitter @daniromerotv
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