U.S. stocks finished higher on Tuesday after investors parsed signs of a cooling labor market and waning consumer confidence, which could mitigate the need for more interest-rate hikes by the Federal Reserve. The S&P 500
SPX,
gained 64.44 points, or 1.5%, to 4,497.67, according to preliminary closing data from FactSet, marking the index’s best day in three months. The Dow Jones Industrial Average
DJIA,
gained 292.96 points, or 0.9%, to 34,852.94. The Nasdaq Composite
COMP,
rose by 238.63 points, or 1.7%, to 13,943.76, rising for a third straight day. Data showed the number of job openings in July dropped to 8.8 million, lower than the forecast of 9.5 million, a sign that employers have begun to meaningfully cut back on hiring. Meanwhile, 3.5 million people quit their jobs last month, the lowest level in two-and-a-half years. Meanwhile, a gauge of consumer confidence produced by the Conference Board dropped to 106.1 in August, from 114. Investors have recently cheered data suggesting that the U.S. labor market and economy might be starting to slow, a dynamic that market strategists have called “bad news is good news.” The thinking is that a slowdown in the economy’s rate of growth could help the Fed justify cutting interest rates more quickly by helping to curb inflation.
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