Stocks ran higher for a second straight day, building on Monday's gains which saw the three major indexes each rally more than 2%.
There were two different catalysts behind Tuesday's surge. Both raised hopes that the streak of aggressive Fed rate hikes could end sooner rather than later. One came from the Reserve Bank of Australia, which overnight issued a lower-than-expected rate hike. The other was this morning's Job Openings and Labor Turnover Survey (JOLTS) that showed job openings in the U.S. declined by 10% in August while layoffs edged higher.
"A hot labor market continues to be a challenge to the Fed's goal," says Matt Dyer, investment analyst at institutional asset management firm Penn Mutual Asset Management. But while "this morning's JOLTS data release shows some signs of cooling, the labor market is still running extremely hot with job openings outweighing the number of job seekers," Dyer adds.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The day's headlines weren't all about global central banks and economic data, though. In single-stock news, Twitter (TWTR, +22.2%) rallied after Bloomberg reported that Tesla (TSLA, +2.9%) CEO Elon Musk will reverse course and go through with his original $44 billion bid to buy the social media company. The two parties were scheduled to go to court later this month after Musk in August accused Twitter of fraud and said he wanted to walk away from the deal.
"It's the latest twist in the dramatic takeover saga, and comes just two days before he was set to be deposed by Twitter's lawyers, raising speculation that 'Team Musk' believe the chances of the court ruling in his favor were slim," says Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown. "If Elon Musk loses, it could mean he'd be forced to complete the deal or be made to pay billions or more for breach of contract."
At the close, the Dow Jones Industrial Average was up 2.8% at 30,316. The S&P 500 Index (+3.1% at 3,790) and the Nasdaq Composite (+3.3% at 11,176) also finished with solid gains.
Other news in the stock market today:
- The small-cap Russell 2000 rocketed 3.9% to 1,775.
- U.S. crude futures jumped 3.5% to finish at $86.52 per barrel ahead of tomorrow's highly anticipated OPEC+ meeting.
- Gold futures gained 1.7% to end at $1,730.50 per ounce.
- Bitcoin rose 3.4% to $20,220.13. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
- Poshmark (POSH) popped 13.1% after the online second-hand apparel marketplace said it will be acquired by South Korean internet firm Naver for $1.2 billion, or $17.90 per POSH share. Today, the stock closed just below here at $17.61. "E-commerce has been one of the toughest sub-groups in our coverage over the past 12-18 months, with the average of our six e-commerce names trading ~80% below their 52-week highs," says Wedbush analyst Tom Nikic (Neutral). "This deal, however, may have created a 'floor' for this beaten-down group. Admittedly, POSH does have some key advantages that make them relatively more attractive to potential acquirers (healthy cash balance, asset-light business model, large user base, 'social network' characteristics, etc.), but some of the other e-commerce names in our coverage look particularly cheap in light of the proposed takeout."
- Rivian Automotive (RIVN) soared 13.9% after the electric vehicle (EV) maker said production in the third quarter was up 67% from Q2. The company also confirmed that it is on pace to reach its 2022 goal of building 25,000 vehicles.
Midterm Elections and Stocks
Another potentially positive driver for the stock market is right around the corner: the midterms. Congressional midterm elections will occur on Tuesday, Nov. 8, and determine which political party controls the House of Representatives and the Senate for the next two years.
A lot can happen between now and the midterm election races, but odds seem increasingly likely for a split Congress – which tends to be the most bullish outcome for the stock market. "Historically, split governments have been the best for equities," says Savita Subramanian, head of equity and quantitative strategy at BofA Securities. "Q4 has seasonally been the strongest quarter (+4.5% on average and positive 81% of the time), particularly in midterm years (+7.7% on average and 86% positive hit rate)."
But returns aren't the only impact elections can have on the stock market. Here, we explore what else the midterms could mean for investors.
-
Stock Market Today: Stocks Close Mixed Amid War Angst, Nvidia AnxietyMarkets went into risk-off mode amid rising geopolitical tensions and high anxiety ahead of bellwether Nvidia's earnings report.
-
What the Comcast Cable Spinoff Means for InvestorsComcast has announced plans to spin off select cable networks and digital assets into a separate publicly traded company. Here's what you need to know.
-
Stock Market Today: Nasdaq Jumps Ahead of Nvidia EarningsIt was a mostly positive start to a new week of pricing in more Donald Trump.
-
Stock Market Today: Stocks Slip After Powell Talks Rate CutsThe main indexes closed lower Thursday after Fed Chair Powell said there's no rush to cut rates.
-
October CPI Report Hits the Mark: What the Experts Are Saying About InflationCPI While the current pace of rising prices appears to have leveled off, the expected path of rate cuts has become less certain.
-
Stock Market Today: S&P 500 Tops 6K as Election Rally EnduresThe S&P 500 closed just below the 6,000 mark on Monday.
-
Why Is Warren Buffett Selling So Much Stock?Berkshire Hathaway is dumping equities, hoarding cash and making market participants nervous.
-
Fed Cuts Rates Again: What the Experts Are SayingFederal Reserve The central bank continued to ease, but a new administration in Washington clouds the outlook for future policy moves.
-
Stock Market Today: Dow Jumps 1,500 Points on Election OutcomeThe removal of election uncertainty unleashed a powerful rally in equity markets.
-
Market Reaction to Election Results: What the Experts Are SayingJobs Report Election uncertainty has been removed from the list of investors' worries, helping equities soar.
