Stocks Slump on Signs of Economic Slowdown

US stock indexes fell on Tuesday after new economic data suggested the labor market is slowing.

The S&P 500 fell 0.5%, while the Dow Jones Industrial Average fell 0.6%. The Nasdaq Composite fell 0.4%.

The health of the economy, and the resulting future path of interest rates, remains a key focus for investors. Job openings fell to 9.9 million in February, the lowest since 2021, down sharply from January’s downwardly revised 10.6 million, the Labor Department said on Tuesday.

This came after data showed on Monday that manufacturing activity fell for the fifth month in a row. Employment data for March is expected on Friday, which will give investors more information on the health of the labor market.

“This decline in job openings suggests a cooling even before any tightening of credit conditions from bank stress,” said Jake Remley, senior portfolio manager at Income Research and Management.

US stocks have quietly started April, after a turbulent first quarter. Major indexes held firm in the face of a banking crisis that caught the financial world by surprise in March. All three major stock indexes ended the first three months of the year with gains, despite a big selloff in banking stocks and highly volatile bond trading.

“We’ve been through a very significant period of inflation and followed it up with a period of significant rate increases,” said Jason Pride, Glenmede’s head of private wealth investments. “Historically speaking, that hasn’t been very good for the economy.”

Oil prices rose. The first-month contract for benchmark Brent crude rose a penny to $84.94 a barrel, marking their biggest gain in more than a year on Monday, as a group of producers led by Saudi Arabia they said they would cut production.

“We are in a wait-and-see mode in terms of how the economy plays out,” said Brian O’Reilly, head of market strategy at Mediolanum International Funds. High interest rates are starting to hurt the economy, he added. “We’re not waving the white flag yet, but there are enough issues that we’re relatively cautious.”

US government bond yields fell. The yield on the benchmark 10-year Treasury note fell to 3.363%, from 3.430% on Monday. Bond yields and prices move in opposite directions.

Shares of online marketplace Etsy rose 4.4%, while shares of Prudential Financial advanced 1.8%.

Virgin Orbit shares fell 19% after Richard Branson’s satellite launch company filed for bankruptcy and said it was working to sell itself. Shares of AMC Entertainment fell 19% after the movie theater operator said it would settle a lawsuit filed by shareholders.

Overseas indexes were mixed. Japan’s Nikkei 225 index rose 0.4%. The Shanghai Composite Index added 0.5%. Hong Kong’s Hang Seng Index fell 0.7%. In Europe, the Stoxx 600 fell 0.1%

Investors remain focused on inflation and the Federal Reserve. Photo: ANDREW KELLY/REUTERS

Email Charley Grant at [email protected] and Will Horner at [email protected]

We want to hear from you

What is your investment strategy for 2023? Has the recent market turmoil changed your approach? Tell us about your experience here.

Household Income Level

Select one…0 – $47,900 $48,000 – $75,300 $75,400 – $127,300 $127,400 – $188,400 $188,500 and up

Name

Age

OCCUPATION

City state

Email

By submitting your response to this questionnaire, you consent to Dow Jones processing your specific categories of personal information and are indicating that your responses may be investigated and published by The Wall Street Journal and that you are willing to be contacted by a Journal reporter about discuss the answers further. In an article on this topic, the Journal will not attribute your responses to you by name, unless a reporter contacts you and you give your consent.

Copyright ©2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8