Wall Street Responds to Labor Market Slowdown and Fed Rate Cut Speculations

Wall Street received further indications of a slowing labor market, potentially leading to Federal Reserve rate cuts this year. Equities saw a slight increase after jobless claims rose to their highest level since August, surpassing estimates and prompting traders to increase their bets on policy easing in 2024. In the Treasury market, short-term maturities outperformed, with the S&P 500 hovering near 5,190 and two-year yields dropping to 4.8%. Following tepid demand for a recent 10-year bond auction, the U.S. will test the market with a $25 billion sale of 30-year Treasuries.

Corporate Highlights:

• Arm Holdings Plc’s ( $ARM) shares fell after the chip designer projected a tepid revenue forecast for the fiscal year, raising concerns about a slowdown in the tech industry’s AI spending.
• Alphabet Inc., ( $GOOG) Google’s parent company, is progressing in its negotiations to acquire HubSpot Inc., according to sources.
• A Boeing Co. ( $BA) 737, 30 years old, skidded off the runway in Dakar, Senegal, injuring 10 people, as reported by the country’s transport minister.
• Airbnb Inc. ( $ABNB) shares dropped after the company provided lackluster guidance for two consecutive quarters, suggesting a slowdown in travel spending before the peak summer season.
• Warner Bros. Discovery Inc. ( $WBD) CEO David Zaslav has directed his team to identify further cost-cutting opportunities to meet financial goals over the next few years.
• Robinhood Markets Inc. ( $HOOD) reported its second consecutive quarterly profit, driven by higher interest rates and increased cryptocurrency trading.
• Duolingo Inc.’s ( $DUOL) shares fell after the education software provider reported its slowest user growth rate since Q3 2022.
• Brookfield Corp. ( $BN) saw a 5% rise in distributable earnings, surpassing analysts’ expectations, with its insurance business’s higher profits helping to mitigate a downturn in Brookfield Asset Management.