Investing.com– U.S. stocks drifted lower Tuesday as investors awaited a slew of key readings on the U.S. labor market as well as potential interest rate cuts in Europe and Canada this week.
At 09:35 ET (13:35 GMT), the Dow Jones Industrial Average fell 135 points, or 0.4%, the S&P 500 dropped 17 points, or 0.3%, and the NASDAQ Composite slipped 55 points, or 0.3%
Investors wary ahead of key payrolls release
Purchasing managers index data for May showed manufacturing activity slowed for a second straight month, with the reading coming just days after U.S. gross domestic product data was revised lower in the first quarter.
This weakness saw investors increasing bets that the Federal Reserve will begin cutting interest rates in September, particularly after inflation data on Friday showed signs on stabilizing.
The focus this week is on key nonfarm payrolls data on Friday, with the labor market being another major consideration for the Fed in cutting rates.
Friday’s closely watched nonfarm payrolls report is expected to show that the U.S. labor market remained strong again in May, with 185,000 jobs added, a modest uptick from the prior month.
Investors had been worried that an overly strong economy might prevent the U.S. Federal Reserve from lowering rates this year at all, or even require a rate rise. But those concerns were alleviated last month, albeit temporarily, by data showing slowing inflation and a cooling labour market.
A precursor to Friday’s release is seen later Tuesday in the form of the JOLTS job openings for April.
The Fed is set to meet next week, and could feel pressure from the expected rates cuts by the European Central Bank and the Bank of Canada later this week.
GameStop slumps, Tesla hit by China sales drop
In the corporate sector, GameStop (NYSE:GME) stock slumped 6% in volatile trading, handing back some of the previous session’s sharp rally after stock influencer Keith Gill appeared to hold on to gains in his holdings of the videogame retailer following a sharp rally on Monday.
Illumina (NASDAQ:ILMN) rose just under 1% following a decision by the gene sequencing firm to spin off its Grail cancer testing division.
Additionally, Tesla’s (NASDAQ:TSLA) stock fell 0.5% after its sales of China-made electric vehicles fell by 6.6% to 72,573 in May compared to a year ago, Reuters reported on Tuesday, citing data from the China Passenger Car Association.
Crude weakens after OPEC+ meeting
Crude prices fell Tuesday, extending losses from the previous session, after a group of major producers signaled an increase in supply later this year.
By 09:35 ET, the U.S. crude futures (WTI) traded 1.6% lower at $73.02 per barrel, while the Brent contract dropped 1.6% to $77.20 per barrel. Both contracts slid over 3% on Monday, and were at their lowest level since early-February.
The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, on Sunday agreed to extend most of their oil output cuts into 2025 but left room for voluntary cuts from eight members to be gradually unwound.
(Ambar Warrick contributed to this article.)
https://www.investing.com/news/stock-market-news/us-stock-futures-steady-as-markets-look-to-rate-cuts-jobs-data-3468993
