Wall Street futures kick off September under pressure as yields, oil prices rise
The jobs reports are expected to be analysed for clues about the health of the labour market after Federal Reserve chair Kevin Warsh said taming inflation is the central bank's key focus.
US stock index futures started September on a down note on Tuesday, as bond yields and oil prices climbed, dampening investor enthusiasm for equities at the onset of what is typically a weak month for the stock market. The Dow E-minis fell 0.4%, S&P 500 E-minis dropped 0.47%, and Nasdaq 100 E-minis declined 0.9%. This weak start to the month was further exacerbated by a surge in expectations of interest rate hikes and heightened concerns about potential inflation, as well as Middle East tensions.
The selloff in US Treasuries contributed to the rise in yields, further disheartening risk appetite. While yields may not reach crisis levels, macro analyst Richard de Chazal of William Blair noted that the era of low rates is unlikely to return soon. Investors are also facing seasonal weakness, with the S&P 500 typically losing 0.7% on average in September, making it the weakest month for stocks since records began in 1926.
Despite this, some analysts, like Ameriprise Financial's Anthony Saglimbene, believe that investors should stay invested through the seasonal fluctuations rather than trying to time their moves. The labor department's Job Openings and Labor Turnover Survey, known as the JOLTS report, will feature prominently later in the session, alongside the critical nonfarm payrolls data on Friday.
Investors will closely analyze these reports for insights into the health of the labor market, with Federal Reserve Chair Kevin Warsh emphasizing the importance of taming inflation as the central bank's primary objective. Meanwhile, chip stocks saw a decline before the opening bell, with Nvidia, Intel, and AMD each falling between 1.2% and 1.9%.
Other notable movers included Robinhood, which rose 2.5% after Morgan Stanley upgraded the stock, and Hut 8, which added 1.82% following reports of a data center development deal between Anthropic and Lambda. Energy stocks gained ground after a 1.67% increase in Brent crude, with Exxon Mobil and Devon Energy both up by 1% and 1.3%, respectively.
Written by urgent.news from Free Malaysia Today's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
