Stocks looked set to fall on Tuesday, with investors feeling on edge about looming U.S. jobs data and uncertainty around President Donald Trump’s tariffs.
Futures tracking the Dow Jones Industrial Average were down 194 points, or 0.4%. S&P 500 futures slid 0.5%, and contracts tied to the tech-heavy Nasdaq 100 dropped 0.7%.
U.S. stock exchanges were closed for Labor Day on Monday, so the action ahead of the opening bell will be investors’ first chance to gauge whether equities can continue to rack up gains after a stellar summer.
Perhaps it’s not a surprise that the three blue-chip indexes were set to open in the red, given that September is historically a poor month for the market. Wall Street is also feeling reluctant to pile into shares ahead of Friday’s nonfarm payrolls report, one of the few remaining economic data releases that could stop the Federal Reserve from cutting interest rates this month.
“Strong earnings and growing hopes for further interest-rate cuts helped tech stocks in particular to sizzle over the summer,” Derren Nathan, head of equity research at Hargreaves Lansdown, said. “Now investors have returned to wait-and-see mode in what is typically one of the poorest months of the year for stock market returns.”
Uncertainty over the Federal Reserve’s independence and U.S tariffs may also have been weighing on sentiment. President Donald Trump has repeatedly pressured the Fed to cut rates and his recent move to fire Fed Gov. Lisa Cook was considered a potential threat of the central bank’s independence. Cook is challenging the decision and a judge made no immediate ruling after a court hearing Friday.
Regarding tariffs, a federal appeals court on Friday upheld a lower court ruling that most of the levies were illegal. However the tariffs will remain in place until at least October 14 allowing Trump time to appeal to the Supreme Court.
The yield on the benchmark 10-year U.S. Treasury note ticked up 5 basis points to 4.28% in early trading on Tuesday. The U.S. dollar climbed 0.4% against a weighted basket of its peers, and gold futures jumped 1% to $3,550 an ounce, trading just below the record they hit on Monday.
