Updated 1 min read
US stock futures meandered on Tuesday morning as uncertainty around the war in Iran, the bond market, and the Fed’s next interest rate move largely kept buyers on the sidelines.
Futures on the Dow Jones Industrial Average (YM=F) and S&P 500 (ES=F) fell about 0.5%, while Nasdaq-100 (NQ=F) contracts dipped 0.8% after stocks closed August with solid gains.
Stocks entered September with double-digit year-to-date returns and earnings expectations that continue to rise. However, volatile oil prices and the potential return of Fed rate hikes have given investors reason to worry heading into the historically weakest month for stocks.
Crude oil prices remained elevated after the US and Iran returned to a hot war on Sunday, with Brent futures (BZ=F), the global benchmark, trading near $90 per barrel. Treasury yields have also stayed high, with the 10-year yield (^TNX) rising to 4.75%.
On Tuesday, the Job Openings and Labor Turnover Survey (JOLTS) will kick off a string of labor market updates this week, offering a look at hiring and quits ahead of the monthly jobs report on Friday. Data releases from S&P Global and the Institute for Supply Management will also give insight into manufacturing activity.
The gush of second quarter earnings reports may have slowed to a trickle, but releases from Dell (DELL) and Palo Alto Networks (PANW) will give insight into how big corporations are spending money on tech and cloud services.
LIVE 2 updates
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Good morning. Here’s what’s happening today.
Economic data: S&P Global US manufacturing PMI, August final reading (53.3 expected, 53.2 previously); ISM manufacturing, August (55.2 expected, 55.6 previously); ISM prices paid, August (71.2 expected, 71.1 previously); ISM new orders, August (57 expected, 56.7 previously); ISM employment, August (52.5 expected, 52.8 previously); Construction spending, month-on-month, July (0% expected, -0.1% previously); JOLTS job openings, July (7.3 million expected, 7.359 million previously); JOLTS quits rate, July (+2% previously); JOLTS layoffs rate, July (+1.1% previously); Dallas Fed services activity, August (6.6 previously); Omdia total vehicle sales, August (16.3 million expected, 16.33 million previously)
Earnings calendar: Palo Alto Networks (PANW), Dell Technologies (DELL), Medtronic (MDT), MongoDB (MDB)
Catch up on some top stories from overnight:
SEC chairman moves to give US states power over shareholder resolutions
Apple says OpenAI is destroying evidence in trade secrets case
Trump strikes Medicaid drug price deals with nine pharma firms
State Farm sued by Los Angeles County for allegedly mishandling wildfire claims
AI could cause global economic downturn, Andrew Bailey warns G20
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Oil extends gains, stocks drop as Trump issues fresh Iran warning
The AFP reports:
Oil prices extended gains Tuesday amid fears of a fresh bout of military exchanges between the United States and Iran following a flare-up at the weekend and Donald Trump’s warning that he will hit the country “hard”.
The latest bout of strikes between the foes has further stoked worries about inflation that has put pressure on central banks to hike interest rates, which has in turn jolted equity markets.
After six months of war, the conflict remains at an impasse, with Tehran keeping the strategic Strait of Hormuz closed and Washington continuing a counter-blockade of Iranian ports.
The United States carried out strikes on an Iranian island in the waterway on Sunday, with Tehran quickly retaliating by attacking US military targets in the Middle East.
The exchange raised fears of a return to major hostilities, with the US president vowing to respond.
“We’re going to hit them hard,” Trump said, according to a Fox News reporter who spoke to him briefly. “There will be a response.”
