Data on Tuesday showed that U.S. job openings fell to their lowest level in more than three years in April, signaling an easing in labor market tightness that supported a Fed rate cut this year. The U.S. Treasury yields slipped following the report.

Wall Street's main indexes were gaining ground after paring earlier loses. Equities in real estate and consumer staples sectors were advancing ahead of others, while materials and energy stocks were the biggest losers.

The labor market data was the latest in a string of recent reports that pointed to cooling U.S. economic growth. Data on Monday had showed that U.S. manufacturing activity had slowed for the second straight month in May.

"What we've seen in the data so far this week is that it's been relatively weak, starting with manufacturing PMI and job openings today," said James St. Aubin, chief investment officer at Sierra Mutual Funds in California.

"That has had a total effect of helping the rally in the bond market; but for the stock market, it's a double-edged sword because they're looking for a rate cut announcement, which has a rising probability with weaker data," St. Aubin added.

Market expectations for a September rate reduction now stand around 65%, versus below 50% last week, according to the CME's FedWatch tool. The closely watched non-farm payrolls data for May is due on Friday.

At 2:18 p.m. EDT, the Dow Jones Industrial Average rose 144.75 points, or 0.38%, to 38,715.78, the S&P 500 gained 3.70 points, or 0.07%, to 5,287.10 and the Nasdaq Composite gained 12.12 points, or 0.08%, to 16,842.08.

Megacap technology stocks, including Amazon.com (NASDAQ:AMZN), Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT), were trading higher after losing ground early in the session.

Oil giants Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX) were down 1.8% and 0.9%, respectively, as demand concerns weighed on crude prices.

Bath & Body Works (NYSE:BBWI) slumped 12.5% after a lower revision to its quarterly profit forecast. Axos Financial (NYSE:AX) dropped 7.2% after Hindenburg Research disclosed a short position in the lender.

Paramount Global fell 4% after the media conglomerate said it was exploring strategic options or a joint venture for its Paramount+ streaming service.

Declining issues outnumbered advancers by a 1.4-to-1 ratio on the NYSE. On the Nasdaq, 1,467 stocks rose and 2,653 fell as declining issues outnumbered advancers by a 1.81-to-1 ratio.

The S&P 500 posted 16 new 52-week highs and 6 new lows while the Nasdaq Composite recorded 30 new highs and 120 new lows.