Updated 2 min read
US stock futures slipped on Tuesday to start a holiday-shortened trading week, as Wall Street started to look ahead to a crucial monthly jobs update that will shape expectations for interest-rate cuts.
Dow Jones Industrial Average futures (YM=F) slid 0.7%, while those on the S&P 500 (ES=F) dropped 0.8%. Contracts on the tech-focused Nasdaq 100 (NQ=F) fell around 1%, forecasting a sour start to September after another winning month for major Wall Street stock indexes.
Treasury yields rose, with the 30-year (^TYX) jumping to near 4.98%, eyeing the key 5% level for the first time since July. The benchmark 10-year (^TNX) yield rose to near 4.3%.
Nvidia (NVDA) led megacap losses, down over 2% in premarket trading. Tesla (TSLA) and Meta (META) were both down over 1.5%.
Wall Street’s delayed open to the week — after Monday’s closure for the Labor Day holiday — comes ahead of a potentially tumultuous month, with legal drama around President Trump’s tariffs and concerns over Fed independence in high focus.
Gold (GC=F) surged to above $3,500 an ounce on Tuesday to eclipse April’s all-time high at one point. The latest run has been fueled by expectations that the Federal Reserve will lower interest rates this month, after Chair Jerome Powell opened the door to a reduction.
Those rate-cut bets face a key test in Friday’s jobs report for August — in keen focus, after disappointing inflation data dented stocks last week. Readings on job openings and private payrolls precede the crucial report, while an update on US manufacturing on Tuesday will shed light on the economy.
Markets are pricing in roughly 90% odds of a 25 basis point rate cut in September, but this week’s data could help make the case for deeper easing.
Meanwhile, investors are watching developments in Washington that could test the Fed’s independence. A court hearing last week on whether Trump can fire Fed Governor Lisa Cook ended without a ruling as the president continues to make attempts to stack the Fed’s Board of Governors in his favor.
The first market moves in September also follow a potentially major legal blow to Trump’s trade agenda. A federal appeals court ruled Friday that the bulk of Trump’s sweeping global tariffs were unconstitutional. Trump blasted the decision as “highly partisan” and vowed to take the case to the Supreme Court.
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Pepsi stock gains 5% after activist investor takes $4 billion stake
PepsiCo (PEP) stock jumped 5% in premarket trading on Tuesday after the Wall Street Journal reported that activist investor Elliott Investment Management built a $4 billion stake in the company.
According to the report, Elliott plans to use its position, which makes it one of Pepsi’s top five shareholders excluding index funds, to angle for changes at the company and boost the share price.
Pepsi shares have underperformed this year as consumers drink less soda and eat fewer snacks, and as scrutiny over ingredients increases. Year to date, the stock is down 2%, compared to a nearly 10% rise in the S&P 500.
Pepsi has aimed to reverse some of these trends by leaning into other categories, such as energy drinks. Last week, the company announced it boosted its stake in energy drink maker Celsius in a $585 million deal.
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Kraft Heinz to split into two companies in bid to revive growth
Kraft Heinz (KHC) is splitting into two companies a decade after a massive merger created one of the biggest food giants in the world.
Its stock ticked up in premarket trading on Tuesday, as the company confirmed The Wall Street Journal’s report last week that it was closing in on a break-up. Its share price has lagged this year, down about 9%, as its core products struggled.
Reuters reports:
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Premarket trending tickers: Nvidia, Amazon and Newmont
Here’s a look at some of the top stocks trending in premarket trading:
Nvidia (NVDA) stock slid 2% premarket on Tuesday after dropping more than 3% Friday. The AI chip maker’s projected $54 billion Q3 revenue disappointed investors, sparking concerns about slowing AI spending.
Amazon.com, Inc. (AMZN) stock fell 1% before the bell on Tuesday following the news that the tech giant’s sign-ups in the US failed to meet last year’s total and even the company’s own target, according to internal company data reviewed by Reuters.
Newmont (NEM) shares rose almost 2% on Tuesday as gold (GC=F) hit a record high, fuled by bets the Fed will cut rates later this month.
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Good morning. Here’s what’s happening today.
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Why hedge funds are starting September still cautious about US stocks
After becoming net sellers of US stocks in August, hedge funds remain hesitant about buying as September trading kicks off, Reuters reports.
The month has often been a downbeat one for markets. History looks set to repeat itself, even with a potential US interest-rate cut on the horizon.
Seasonal red flags, market fragility, a China buying spree, and a potential vicious circle of selling lie behind hedge funds’ reluctance to join the recent rally, Wall Street sources say.
Reuters reports:
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August jobs report to land amid Fed uncertainty: What to watch this week
This week brings just four days of trading and a crucial nonfarm-payrolls report — the first since July’s dramatic revisions and an abrupt change in BLS leadership surprised investors.
The August jobs report’s importance for investors is downstream of its importance for the Federal Reserve, note Yahoo Finance’s Jake Conley and Myles Udland.
They report:
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Gold pushes past record high of $3500, buoyed by rate-cut speculation
Bloomberg reports:
