Futures tied to Wall Street’s main indexes slipped on Wednesday, as fresh concerns over the health of the U.S. economy kept investors on the sidelines ahead of labor data.
In the previous session, the indexes had logged their biggest one-day loss since early August after investors dumped technology-related stocks in a dour start to what has been a historically weak month for U.S. equities.
The risk-off mood was exacerbated by data that showed manufacturing activity shrank, nearly a month after signs of softening labor demand sparked a global market rout.
“The weak ISM print did not help and with the all-important (labor) numbers on Friday, it is understandable why some bets were taken off the table,” Arun Sai, senior multi-asset strategist at Pictet Asset Management told the Global Markets Forum.
Traders now await July’s Job Openings and Labor Turnover Survey at 10 a.m. ET on Wednesday, ahead of Friday’s non-farm payrolls report, which could offer clues about the size of the Federal Reserve’s expected interest-rate cut in September.
Markets see a 61% chance of the U.S. central bank cutting interest rates by 25 basis points, according to CME Group’s FedWatch Tool, while that of a 50 bps cut has increased to 39% from around 31% a day earlier.
Data on July factory orders and the Fed’s survey, known as the “Beige Book”, are also expected on Wednesday.
At 07:13 a.m. ET, Dow E-minis were down 61 points, or 0.15%, S&P 500 E-minis were down 22 points, or 0.40% and Nasdaq 100 E-minis were down 138.25 points, or 0.73%.
AI-powered chip stocks fell in the previous session, with the Philadelphia SE Semiconductor index falling 7.8% to its steepest one-day drop since the COVID-19 pandemic.
Nvidia (NASDAQ: NVDA) fell 2% in premarket trading after a report said the U.S. Department of Justice sent a subpoena to the AI chip firm as it deepens its probe into the company’s antitrust practices.
A 10% slump in the previous session had wiped off a record $279 billion from Nvidia’s market capitalization – the biggest ever single-day decline in market value for a U.S. company.
Other growth stocks such as Tesla (NASDAQ: TSLA) fell 1.1%, Apple (NASDAQ: AAPL) shed 0.9% and Microsoft (NASDAQ: MSFT) slipped 0.7%.
Among others, Zscaler (NASDAQ: ZS) forecast fiscal 2025 revenue and profit below estimates, sending the cybersecurity company’s shares down 15%.
Dollar Tree (NASDAQ: DLTR) tanked 12% after the discount store operator trimmed its annual sales and profit forecast, while – Skippy peanut butter maker Hormel Foods (NYSE: HRL) slid 5% after it lowered its annual sales forecast.
(Source: ReutersReuters)
