Wall Street Pauses Near Record Highs After Job Revisions Keep Rate Cut Bets Intact

Wall Street's main indexes were largely subdued on Tuesday after closing near record highs in the previous session, while a downwards payrolls revision kept intact bets of interest rate cuts from the Federal Reserve.

The U.S. economy likely created 911,000 fewer jobs in the 12 months through March than previously estimated, the government said, suggesting that job growth was already stalling before President Donald Trump's aggressive tariffs on imports.

Bets on a 25 basis point cut, that was already priced in, were intact while ones on a jumbo 50 bps reduction remained at about 8.2%, as per CME's FedWatch tool.

Labor market indicators recently have already cast concerns across the minds of investors and Fed officials alike, with nonfarm payroll data for July and August confirming weakening labor market conditions.

"Investors are hoping that each one of these individual data points will add up to a consistent picture that will be able to support the Fed cutting rates," said Peter Andersen, founder of Andersen Capital Management.

"The market is getting set up to have a tremendous disappointment if the Fed doesn't take action."

At 12:02 p.m. ET, the Dow Jones Industrial Average rose 41.99 points, or 0.09%, to 45,556.94, the SP 500 lost 2.52 points, or 0.04%, to 6,492.63 and the Nasdaq Composite fell 12.99 points, or 0.06%, to 21,785.71.

Israel's attack on Hamas leaders in Qatar's capital city, Doha, pushed oil prices higher, lifting the energy sector 1.1%.

UnitedHealth gained 6.7% after the health insurer said it expects enrollment in top-rated Medicare insurance plans to be in line with its expectations, keeping the Dow afloat.

On the flip side, the Philadelphia Housing Index fell 3.1% after four sessions of gains.

Markets will be parsing through a producer inflation reading on Wednesday and a consumer prices reading on Thursday to gauge the impact of Trump's tariff policies, and whether a case could be made for a bigger rate cut.

The three main indexes finished Monday's session on a higher note, with the tech-heavy Nasdaq closing at a record, lifted by a rally in chip major Broadcom.

Wall Street has had a broadly positive start to September, a month deemed historically bad for U.S. equities, with the benchmark index losing 1.5% on average since 2000, data compiled by LSEG showed.

In other stocks, Nebius soared about 43.6% after the AI infrastructure firm signed a $17.4 billion deal with Microsoft. Rival CoreWeave also rose 4.2%.

Class B shares of Fox Corp and News Corp dipped 6% and 3.4% respectively. Rupert Murdoch and his children reached an agreement that will give the eldest son Lachlan Murdoch control over the media empire.

Albemarle plunged 11.3%, the biggest decliner on the SP 500, on easing supply concerns after Chinese battery giant CATL expects to resume production at a lithium mine.

Quarterly results from cloud service provider Oracle after the market's close will be parsed for additional insights into AI demand across the technology sector.

The SP 500 posted 15 new 52-week highs and no new lows, while the Nasdaq Composite recorded 75 new highs and 55 new lows.

Declining issues outnumbered advancers by a 1.78-to-1 ratio on the NYSE and by a 1.59-to-1 ratio on the Nasdaq. (Reporting by Purvi Agarwal and Ragini Mathur in Bengaluru; Editing by Pooja Desai and Maju Samuel)

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