(Reuters) – U.S. stock index futures traded lower on Tuesday as caution prevailed ahead of a slew of economic data reports due through the week that would influence the extent of monetary policy easing by the Federal Reserve this yr.
The blue-chip Dow and the benchmark S&P 500 recovered from early August’s losses and ended higher on Friday, notching their fourth-straight month in gains, after data pointed to a strong economy and moderating price pressures.
The Dow is at a record high and the S&P 500 is inside 1% of its own milestone as markets enter into what has been a historically weak month for the most important indexes on average.
Traders proceed to scour for reassuring signs in regards to the economy, with the discharge of the monthly ISM manufacturing survey due at 10 a.m. ET. Economists forecast the manufacturing index to rise to 47.5, but remain in contractionary territory.
A lot of labor market numbers may also be parsed through the week, ahead of Friday’s non-farm payrolls figure for the previous month. The roles market has come under greater scrutiny, after July’s report hinted at a greater-than-expected slowdown, that consequently sparked a world selloff in riskier assets.
The central bank’s meeting later within the month might be closely observed, following Chair Jerome Powell’s recent support for forthcoming policy adjustment. Odds of a 25-basis point rate of interest cut are at 69%, based on the CME Group’s FedWatch Tool, while those for a much bigger 50 bps reduction are at 31%.
At 05:30 a.m. ET, Dow E-minis were down 178 points, or 0.43%, S&P 500 E-minis were down 30 points, or 0.53%, Nasdaq 100 E-minis were down 161 points, or 0.83%.
Rate-sensitive chip stocks led premarket declines, with Nvidia down 2.3%, Broadcom dropping 1.8%, Advanced Micro Devices losing 1.3%, after the Philadelphia SE Semiconductor index’s 2.6% jump on Friday.
Amongst others, Tesla added nearly 1%, after a report said it plans to supply a six-seat variant of its Model Y automotive in China from late 2025. Individually, the automaker’s sales in China logged their best month for the yr to date in August.
Boeing lost 2.6% after brokerage Wells Fargo downgraded the planemaker to “underweight” from “equal weight”.
U.S. Steel dropped 5% after Democratic presidential candidate Kamala Harris expressed her concern in regards to the steel firm being acquired by Japan’s Nippon Steel.
(Reporting by Johann M Cherian in Bengaluru; Editing by Shounak Dasgupta)