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U.S. stock futures fell in early trading on Tuesday, while Treasuries and the dollar rose slightly as investors expected a cautious start to the traditionally challenging month of September with a focus on the labor market.
stocks closed August with modest gains, with investors dumping growth and technology stocks for the safer confines of Treasury bonds and dividend stocks heading into the fall.
In fact, the tech-focused Nasdaq is down 0.11% in the third quarter, after posting a modest 0.6% gain in August following a disappointing second-quarter earnings report from star ai chipmaker Nvidia. (NVDA) .
Both the Dow Jones Industrial Average and the S&P 500 posted decent gains in August, with the latter now up 3.44% on the quarter, thanks in part to the rotation into safe havens that characterized the past few weeks of trading.
This week, Wall Street's focus will be clearly and firmly on the economy. Today at 10:00 a.m. ET, key data on manufacturing growth is due, and Wednesday is set to see the start of a series of readings on the labor market as investors look to determine the timing and pace of interest rate cuts by the Federal Reserve.
Olivier Douliery/Bloomberg via Getty Images
The Labor Department's nonfarm payrolls report is due out Friday, with economists expecting a gain of about 160,000 new jobs and a modest decline in the overall unemployment rate to 4.2%.
CME Group's FedWatch suggests traders have placed their bets on a Fed rate cut later this month in Washington, with odds of a whopping 50 basis point reduction pegged at around 33%.
Only six S&P 500 companies are expected to report second-quarter earnings this week, including technology equipment maker Broadcom. (AVGO) Dick's Sporting Goods (DKS) Hewlett Packard Enterprise (Energy Efficiency) and the Kroger supermarket chain (CR) to close the reporting season.
Related: Fed rate cuts may not guarantee a September stock market rally
Second-quarter earnings growth has been solid, with collective profits up 13% from a year ago to $503.4 billion on an equity-weighted basis, driven by the technology and communications sectors.
Earnings growth for the current quarter, which will begin reporting next month, is forecast at around 5.7%, with collective profits of around $513.1 billion, according to LSEG data.
Heading into the opening day on Wall Street and the final month of the third quarter, futures contracts tied to the S&P 500 suggest a 32-point drop at the opening bell, while those tied to the Dow are priced to retreat 228 points from last week's record close.
Meanwhile, the Nasdaq drops 160 points, with Nvidia and Apple (APL-American Lead Association) and amazon (amazon.com) Trade in the red.
US Steel (unknown) Shares were the first to move actively, falling 7.7% in premarket trading to $34.98 following comments from Vice President Kamala Harris suggesting she would not support a $14.1 billion takeover of the steelmaker by Japan's Nippon Steel.
In the bond market, benchmark 10-year Treasury yields were 1 basis point lower than last Friday's close at 3.907%, while 2-year bonds were at 3.927%.
More Wall Street analysts:
- Analysts update target price on Grand Theft Auto maker's stock
- An American Express stock analyst warns of a worrying shift in consumer behavior
- Analyst reinstates Nvidia stock price target ahead of earnings
In overseas markets, European stocks fell as investors eyed U.S. futures and this week's batch of jobs data, with the Stoxx 600 down 0.26% and Britain's FTSE down 0.4%.
Overnight in Asia, Japan's Nikkei 225 closed down 0.04% in Tokyo, while the benchmark MSCI Asia ex-Japan index fell 0.51% in late trading.
Related: Veteran fund manager sees world of trouble ahead for stocks
