U.S. Stocks May Lack Direction Following Mixed Jobs Data

(RTTNews) - The major U.S. index futures are currently pointing to a roughly flat open on Tuesday, with stocks likely to show a lack of direction after ending yesterday's choppy session modestly lower.

Traders may be reluctant to make significant moves as they attempt to discern the impact of the release of mixed U.S. jobs data.

While the Labor Department released a report this morning showing stronger than expected job growth in the month of November, the increase followed a notable loss of jobs in October.

The report said non-farm payroll employment climbed by 64,000 jobs in November after tumbling by 105,000 jobs in October. Economists had expected employment to rise by 50,000 jobs.

Meanwhile, the Labor Department said the unemployment rate rose to 4.6 percent in November from 4.4 percent in September. The unemployment rate was expected to tick up to 4.5 percent.

A separate report released by the Commerce Department showed retail sales in the U.S. were roughly flat in the month of October.

The Commerce Department said retail sales were virtually unchanged in October after inching up by a downwardly revised 0.1 percent in September.

Economists had expected retail sales to rise by 0.2 percent, matching the increase originally reported for the previous month.

However, excluding sales by motor vehicle and parts dealers, retail sales climbed by 0.4 percent in October after edging up by 0.1 percent in September. Ex-auto sales were expected to rise by 0.3 percent.

Stocks moved to the upside at the start of trading on Monday but quickly gave back ground early in the session. The major averages pulled back well off their early highs and spent much of the rest of the day lingering near the unchanged line.

The major averages eventually ended the day modestly lower. While the tech-heavy Nasdaq slid 137.76 points or 0.6 percent to 23,057.41, the S&P 500 dipped 10.90 points or 0.2 percent to 6,816.51 and the Dow edged down 41.49 points or 0.1 percent at 48,416.56.

The initial strength on Wall Street came as some traders looked to pick up stocks at somewhat reduced levels following the sharp pullback on Friday.

Buying interest waned shortly after the start of trading, however, as AI spending worries continue to weigh on stocks like Broadcom (AVGO) and Oracle (ORCL).

Traders may also have been reluctant to make significant moves ahead of the release of some key U.S. economic data in the coming days.

The data could impact the outlook for interest rates following the Federal Reserve's monetary policy announcement last Wednesday.

While the Fed cut rates by another quarter point, as widely expected, officials' projections showed significant differences of opinion about further rate cuts.

Computer hardware stocks extended the sharp pullback seen during last Friday's session, dragging the NYSE Arca Computer Hardware Index down by 2.9 percent.

Considerable weakness was also visible among software stocks, as reflected by the 1.5 percent loss posted by the Dow Jones U.S. Software Index.

Telecom, networking and brokerage stocks also saw notable weakness, while pharmaceutical and healthcare stocks showed strong moves to the upside.

Commodity, Currency Markets

Crude oil futures are plunging $1.06 to $55.76 a barrel after tumbling $0.62 to $56.82 a barrel on Monday. Meanwhile, after creeping up $6.90 to $4,335.20 an ounce in the previous session, gold futures are inching up $1.10 to $4,336.30 an ounce.

On the currency front, the U.S. dollar is trading at 154.80 yen compared to the 155.21 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is trading at $1.1757 compared to yesterday's $1.1752.

Asia

Asian stocks fell broadly on Tuesday as investors awaited crucial U.S. jobs and inflation readings for additional clues on the Fed's rate trajectory in the new year.

The November jobs report due later in the day will also include an estimate of October payrolls that were delayed by the government shutdown. The U.S. consumer price index due on Thursday could also influence the future path of interest rates.

The dollar hovered near a two-month low in Asian trading and gold dipped below $4,300 per ounce, while oil extended losses on fears of a global glut.

Chinese and Kong shares fell sharply, with selling seen across the board on growth concerns and Beijing's reluctance to unveil sweeping stimulus.

China's Shanghai Composite Index closed down 1.1 percent at 3,824.81 after hitting a two-month low earlier in the day. Hong Kong' Hang Seng Index slumped 1.5 percent to 25,235.41.

Japanese markets tumbled as the yen strengthened against the dollar on safe haven buying and amid bets of a Bank of Japan rate increase later this week. Investors also digested December PMI data showing a modest cooling in overall momentum.

The Nikkei 225 Index dove 1.6 percent to 49,383.29, closing below the 50,000 mark for the first time in over three months. The broader Topix Index settled 1.8 percent lower at 3,370.50 amid bond market jitters.

Chip and artificial intelligence stocks led losses, with Renesas and Shin-Etsu Chemical losing 4-5 percent. Robotics firm Yaskawa Electric plunged 7 percent.

Seoul stocks lost ground amid lingering concerns over the artificial intelligence (AI) sector's profitability. The Kospi plunged 2.2 percent to 3,999.13, ending below the 4,000 mark for the first time in more than a week. Hyundai Motor, SK Hynix and LG Energy Solution tumbled 3-5 percent.

Australian stocks ended modestly lower on fears that the Reserve Bank of Australia could begin tightening policy as soon as February. Adding to the cautious mood, a survey showed Australian consumer confidence slumped in December.

The benchmark S&P/ASX 200 Index fell 0.4 percent to 8,598.90, while the broader All Ordinaries Index closed 0.5 percent lower at 8,880.60.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index inched up 0.1 percent to 13,424.95.

Europe

After moving mostly higher over the course of the previous session, the major European stock markets are turning in a mixed performance on Tuesday.

While the French CAC 40 Index is up by 0.1 percent, the German DAX Index is down by 0.3 percent and the U.K.'s FTSE 100 Index is down by 0.5 percent.

The U.K. unemployment rate rose slightly in the three months to October, the Office for National Statistics said earlier today.

The jobless rate climbed to 5.1 percent in the three months to October from 5.0 percent in the preceding period.

In the three months to October, average earnings excluding bonuses grew 4.6 percent from the prior year, which was slightly faster than the forecast of 4.5 percent.

In November, payroll employees decreased by 171,000 or 0.6 percent from the prior year. Compared to last month, employment grew 38,000 to 30.3 million.

Engine manufacturer Rolls-Royce has moved to the downside despite announcing plans to launch a £200 million interim share buyback program starting January 2, 2026.

Centrica, a British energy and services company, has also fallen after selling Spirit Energy's 15 percent stake in the Cygnus gas field to Serica Energy for 98 million pounds sterling.

Meanwhile, IG Group Holdings has surged. The online trading platform extended its share buyback program after reporting a 29 percent increase in organic trading revenue for the quarter ended November 30.

Holcim has also risen after the Swiss cement maker said it would pay $550 million for a majority stake in Peruvian building materials.

Swedish telecom supplier Ericsson has also advanced after it signed a five-year Master Frame Agreement with stc Group to strengthen Saudi Arabia's digital infrastructure.

U.S. Economic News

Employment in the U.S. increased by more than expected in the month of November, according to a report released by the Labor Department on Tuesday.

The report said non-farm payroll employment climbed by 64,000 jobs in November after tumbling by 105,000 jobs in October. Economists had expected employment to rise by 50,000 jobs.

Meanwhile, the Labor Department said the unemployment rate rose to 4.6 percent in November from 4.4 percent in September. The unemployment rate was expected to tick up to 4.5 percent.

A separate report released by the Commerce Department on Tuesday showed retail sales in the U.S. were roughly flat in the month of October.

The Commerce Department said retail sales were virtually unchanged in October after inching up by a downwardly revised 0.1 percent in September.

Economists had expected retail sales to rise by 0.2 percent, matching the increase originally reported for the previous month.

Excluding sales by motor vehicle and parts dealers, retail sales climbed by 0.4 percent in October after edging up by 0.1 percent in September. Ex-auto sales were expected to rise by 0.3 percent.

At 10 am ET, the Commerce Department is scheduled to release its report on business inventories in the month of September. Business inventories are expected to rise by 0.2 percent in September after coming in unchanged in August.