Market sentiment remains cautious as investors eagerly await crucial labor market data, following Federal Reserve Chair Jerome Powell’s remarks that tempered expectations of aggressive interest rate cuts. At a recent economics conference, Powell reaffirmed the central bank’s intention to reduce borrowing costs by an additional 50 basis points by year-end, citing robust consumer spending and gross domestic income. However, traders are divided on the magnitude of the Fed’s upcoming rate cuts, with a 25 basis point reduction at the November meeting now seen as the most likely outcome.
Today’s focus shifts to the labor market, with the release of August’s job openings and labor turnover survey (JOLTS) and the Institute for Supply Management’s final estimate for manufacturing activity in September. Analysts warn that a surprise in the employment reports could still alter the Fed’s course, as inflation approaches the central bank’s 2% target.
In early trading, Dow E-minis slipped 0.26%, while S&P 500 E-minis edged down 0.09%. Nasdaq 100 E-minis bucked the trend, rising 0.07%. Investors will also parse comments from policymakers, including Atlanta Fed boss Raphael Bostic and Richmond chief President Thomas Barkin, for insights into the economy and monetary policy.
Wall Street’s major indexes closed September on a high note, defying historical trends. The benchmark S&P 500 and Dow Jones Industrial Average notched their fifth consecutive month of gains, closing near record highs. Meanwhile, a port strike on the East Coast and Gulf Coast has halted the flow of half the nation’s ocean shipping, with shares of affected companies like Designer Brands, Costco, and Walmart little changed in premarket trading. CVS Health surged 2.3% on reports it may explore strategic options, including a potential break-up. Tesla shares were flat ahead of its third-quarter delivery report, with analysts expecting an 8% year-over-year increase.
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