U.S. Stock Futures Decline Ahead of Economic Data

U.S. stock futures edged lower on Tuesday as investors considered comments from Federal Reserve Chair Jerome Powell and prepared for key economic data releases.

Market Update

By 06:10 ET (10:10 GMT), the Dow Futures contract was down 145 points, or 0.3%. The S&P 500 Futures decreased by 6 points, or 0.1%, while Nasdaq 100 Futures rose 20 points, or 0.1%.

The Dow Jones Industrial Average and S&P 500 reached record closing highs on Monday following the Fed’s decision to cut interest rates by 50 basis points earlier this month, leading to a positive September—a historically weak month for stocks.

The S&P 500 has gained over 20% this year, marking the first instance since 1997 of such a rise in the first nine months.

Powell Reins in Rate Cut Expectations

The month commenced with Wall Street expressing caution as Powell tempered anticipations for further significant rate cuts, stating that the Fed isn’t rushing to reduce rates rapidly and that any adjustments will take time.

Goldman Sachs strategists believe that Powell’s comments align with their projections of 25 basis point cuts in November and December. They indicated that the choice between 25 and 50 basis points for the November cut remains close.

Focus on Economic Data

Investors are keenly awaiting more U.S. economic data to gauge the Fed’s stance on potential rate cuts this year. The JOLTS report is predicted to reflect approximately 7.640 million job openings for August. The September readings for the Institute for Supply Management’s manufacturing and services indices will also be observed for insight into the economy’s momentum. Additionally, the October nonfarm payrolls report is expected to show an addition of 144,000 jobs.

CVS Health Considers Structural Changes

In corporate news, CVS Health shares rose over 2% in premarket trading following reports that the company is exploring options that could include separating its retail and insurance divisions.

Oil Prices Decline Amid Demand Concerns

Oil prices fell on Tuesday due to lukewarm demand growth overshadowing worries about the escalating Middle East tensions potentially affecting global supply. By 06:10 ET, Brent crude dropped 1% to $71.02 per barrel, and U.S. crude futures declined 1.2% to $67.36 per barrel. The conflict involving Israel and Hezbollah poses a risk of further complications in this oil-rich region. However, a notable decline in Chinese manufacturing activity suggested reduced future demand from the world’s largest crude importer. The American Petroleum Institute is set to provide its weekly estimate of U.S. crude oil and fuel stockpiles for the week ending September 27.