New York Stock Market Falls Ahead of Powell's Remarks and Job Openings... 'Trump Tantrum' US Treasury Yields Calm Down

US Labor Department Announces May Job Openings
Powell's Remarks at ECB Panel Discussion Highlighted
US Treasury Yields Decline

The three major indices of the U.S. New York stock market are declining in early trading on the 2nd (local time). The market is awaiting the release of the Job Openings and Labor Turnover Survey (JOLTs) and remarks from Jerome Powell, Chairman of the U.S. Federal Reserve (Fed). Following a sharp rise the previous day due to former President Donald Trump's reelection prospects, the U.S. Treasury yields, which had shown 'tantrum' symptoms, are weakening.

As of 9:36 a.m. at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average is down 0.1% from the previous close, trading at 39,131.7. The large-cap focused S&P 500 index is down 0.2% at 5,464.02, and the tech-heavy Nasdaq index is down 0.3% at 17,825.41.

By individual stocks, Tesla, which surged 6.05% the previous day, is up another 5.48% today. Paramount Global is rising 3.76% on news that billionaire Barry Diller is considering an acquisition. Nvidia is down 1.79%, and Meta, Facebook's parent company, is down 0.44%. Pharmaceutical company Eli Lilly is down 3.16% after President Joe Biden and Senator Bernie Sanders urged European pharmaceutical companies to lower prices.

The U.S. Department of Labor will release May's job openings data today. Following recent easing in inflation, which influences the Fed's timing for interest rate cuts, attention is on whether the labor market will also show signs of slowing. Market experts expect May's job openings to fall below the previous month's 8.059 million, which was the lowest in three years, forecasting 7.86 million openings. The U.S. employment market is already showing signs of cooling. In April, the number of job openings per unemployed person was 1.2, and the turnover rate was 2.2%, returning to pre-COVID-19 pandemic levels.

Rubila Faruqi, U.S. Chief Economist at High Frequency Economics, said, "Changes in labor market outlook can have a significant impact on the direction of the economy and monetary policy," adding, "One thing we can be sure of is that the situation is changing very rapidly."

The most important employment indicator to be released this week is the June nonfarm payrolls report from the U.S. Department of Labor on the 5th. Experts expect June's nonfarm payrolls to slow significantly to 189,000 from 272,000 in the previous month. The unemployment rate is expected to remain steady at 4%. Prior to this, on the 3rd, the June ADP nonfarm payrolls and last week's unemployment claims will be released. The market expects ADP nonfarm payrolls to increase by 156,000 in June, surpassing the previous month's 152,000.

Chairman Powell will also participate in a panel discussion at the European Central Bank (ECB) forum starting at 9:30 a.m. today. Attention is focused on whether clues about the Fed's future monetary policy can be found during discussions with ECB President Christine Lagarde and others. John Williams, President of the Federal Reserve Bank of New York, will speak on the 3rd and 5th.

The minutes of last month's Federal Open Market Committee (FOMC) meeting will be released on the 3rd. With the Fed having reduced its forecast for the number of rate cuts this year from three to one via the dot plot, attention is on what opinions officials exchanged.

After showing 'Trump tantrum' symptoms and surging the previous day, Treasury yields have calmed. The U.S. 10-year Treasury yield, a global bond yield benchmark, fell 5 basis points (1bp = 0.01 percentage points) to 4.42%, and the 2-year Treasury yield, sensitive to monetary policy, dropped 4 basis points to 4.73%. Last week, following Trump's decisive win in the first presidential TV debate and the U.S. Supreme Court's recognition of immunity, a green light was given to Trump's presidential campaign, causing Treasury yields, especially long-term, to surge the previous day. This was based on expectations that Trump's promised tax cuts would increase the fiscal deficit and that tariff hikes and immigration restrictions would fuel inflation.

International oil prices are rising due to increased summer demand and supply shortage concerns caused by instability in the Middle East. West Texas Intermediate (WTI) crude oil is trading at $83.90 per barrel, up $0.52 (0.62%) from the previous day, and Brent crude, the global oil price benchmark, is trading at $87.11 per barrel, up $0.51 (0.59%).