(Bloomberg) — U.S. stock futures pointed to a weaker open on Wall Street as traders waited for jobs data to guide their outlook on the economy. Nvidia Corp. fell by 1.6% in pre-market trading.
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Contracts on the S&P 500 fell 0.4%, a sign that the decline could moderate after yesterday’s 2.1% sell-off. Losses were wider in Europe and Asia, with traders still shocked by the speed and severity of the US withdrawal. The Cboe Volatility Index climbed above 22, while a gauge for the dollar weakened for the first time in six days.
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A US jobs report due on Wednesday is expected to show a further cooling in the labor market, after yesterday’s data showed a fifth consecutive month of contraction in manufacturing activity. As the market’s focus shifts from inflation to concerns about economic growth, negative macro data is increasingly translating into pain for stocks and other risk assets.
For now, traders expect the Federal Reserve to start easing policy in September and cut rates by more than two percentage points over the next 12 months – the sharpest decline outside a recession since the 1980s. Payroll data due Friday is considered crucial in determining the size of the initial rate cut.
“A disappointing figure will spook markets a bit,” said Neil Birrell, chief investment officer at Premier Miton Investors. “There is just a lack of certainty. I’m not brave enough to say on Wednesday: buy the dip, while the numbers are out on Friday.”
Treasury bonds rose for a second day as traders added to bets on a jumbo cut from the Fed, sending the yield on two-year Treasury notes down to 3.83%. The chance of a half-point cut later this month has increased from 20% last week to about 30%, according to swaps.
Oil rose slightly after crashing to a nine-month low as OPEC+ discussed delaying its plans to increase inventories. Brent futures, the international benchmark, rose above $74 a barrel after a nearly 5% meltdown on Tuesday. West Texas Intermediate rose 0.8% after falling below $70 for the first time since early January.
Business highlights:
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US Steel would close factories and likely move its headquarters out of Pittsburgh if its planned sale to Nippon Steel falls through, CEO David Burritt told the Wall Street Journal.
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Volkswagen AG defended plans to consider unprecedented factory closures in Germany, saying the company has about two too many factories due to stagnant car sales.
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The US Department of Justice has charged Nvidia Corp. and other companies is sending subpoenas as it seeks evidence that the chipmaker violated antitrust laws.
Main events this week:
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Eurozone HCOB delivers PMI, PPI on Wednesday
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Tariff decision Canada, Wednesday
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US Jobs, Factory Orders, Beige Book, Wednesday
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Eurozone retail sales, Thursday
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First U.S. unemployment claims, ADP employment, ISM services index, Thursday
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Eurozone GDP, Friday
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U.S. Nonfarm Payrolls, Friday
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John Williams of the Fed will speak on Friday
Some of the major moves in the markets:
Stocks
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S&P 500 futures fell 0.4% as of 7:11 a.m. New York time
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Nasdaq 100 futures fell 0.8%
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Futures on the Dow Jones Industrial Average fell 0.2%
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The Stoxx Europe 600 fell 1%
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The MSCI World Index fell 0.4%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.1051
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The British pound was little changed at $1.3115
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The Japanese yen rose 0.3% to 145.04 per dollar
Cryptocurrencies
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Bitcoin fell 2.8% to $56,563.19
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Ether fell 2.8% to $2,394.95
Bonds
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The yield on ten-year government bonds fell by two basis points to 3.81%
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The German ten-year yield fell by five basis points to 2.23%
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The British ten-year yield fell by three basis points to 3.96%
Raw materials
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West Texas Intermediate crude rose 1.1% to $71.10 a barrel
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Gold fell 0.2% to $2,488.93 an ounce
This story was produced with the help of Bloomberg Automation.
–With help from Aline Oyamada.
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