Wall Street drifts near its records following mixed data on the job market

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NEW YORK (AP) — The U.S. stock market is drifting on Tuesday following mixed data on the economy’s strength, which did little to clear uncertainty about where interest rates may be heading.

The S&P 500 slipped 0.1% in early trading and remains a bit below its all-time high set last week. The Dow Jones Industrial Average was down 4 points, or less than 0.1%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.2% lower.

Treasury yields also held relatively steady, following an initial swing, after one report said the U.S. unemployment rate was at its worst level last month since 2021, but employers also added more jobs than economists expected. A separate report, meanwhile, said that an underlying measure of strength for revenue at U.S. retailers grew more in October than economists expected.

The mixed reports initially sent Treasury yields lower in the bond market. The knee-jerk reaction among investors was that the data could encourage the Federal Reserve to see the slowing job market as the biggest threat to the economy, rather than high inflation, and cut interest rates further in 2026. But yields quickly recovered some of those dips and drifted up and down.

What the Fed does with interest rates is a top driver for Wall Street because lower rates can give a boost to the economy and to prices for investments, even if they also may worsen inflation. A report coming on Thursday will show how bad inflation was last month, and economists expect it to show prices for U.S. consumers continue to rise faster than anyone would like.

In the bond market, the yield on the 10-year Treasury held at 4.18%, where it was late Monday. The two-year yield, which more closely tracks expectations for the Fed, eased to 3.50% from 3.51%.

Also diminishing the effect of Tuesday’s reports was the possibility that the federal government’s recent shutdown may have distorted some of the data.

“The report on December’s employment data, released in early January ahead of the next meeting, will likely be a much more meaningful indicator for the Fed when it comes to deciding the near-term policy trajectory,” according to Kay Haigh, global co-head of fixed income and liquidity solutions in Goldman Sachs Asset Management.

Helping to keep the overall market in check were continued, mixed swings for stocks that have been caught up in the frenzy around artificial-intelligence technology.

Oracle rose 1.1%, and Broadcom gained 1.6%. They both had dropped to sharp losses last week, even though both reported stronger profits for the latest quarter than analysts expected.

But CoreWeave, which rents out access to top-of-the-line AI chips, fell 2.4%, and Nvidia slipped 0.2%.

Questions remain about whether all the spending that companies are broadly doing on AI technology will produce the kind of profits and productivity that make it worth the expense.

Elsewhere on Wall Street, Kraft Heinz rose 1.2% after saying Steve Cahillane, who was most recently CEO of Kellogg’s-owner Kellanova, will join as CEO on Jan. 1. After Kraft Heinz splits into two companies, which is expected to happen in the second half of 2026, Cahillane will lead the one that will hold onto the Heinz, Philadelphia and Kraft Mac & Cheese brands.

Pfizer fell 1.6% after saying it expects to make between $59.5 billion and $62.5 billion in revenue next year. That’s close to what analysts were expecting.

In stock markets abroad, indexes fell across much of Europe and Asia.

Japan’s Nikkei 225 dropped 1.6% after preliminary factory data showed manufacturing contracting slightly. Investors widely expect the Bank of Japan to announce an increase to interest rates later this week.

South Korea’s Kospi dropped 2.2%, while indexes fell 1.5% in Hong Kong and 1.1% in Shanghai.

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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.