Market caution prevails as investors await key economic data and monitor Middle East tensions, leading to a decline in US stock index futures. The Dow E-minis fell 0.29%, S&P 500 E-minis dropped 0.30%, and Nasdaq 100 E-minis slid 0.42% as traders prepare for a report on jobless claims and the Institute for Supply Management’s services sector survey. The CBOE volatility index, a measure of market anxiety, hovered near three-week highs.
Today’s agenda is headlined by a report expected to show 220,000 Americans filed for unemployment benefits last week, up from 218,000 the previous week. The nonfarm payrolls data, due Friday, will also be closely watched. The services sector survey is expected to remain in expansion territory, with a reading of 51.7.
Despite a strong year for US stocks, with the S&P 500 confirming a bull rally, investors are cautious due to concerns over the scale of the US and Israel’s response to Iran’s recent attack. The Federal Reserve’s potential interest-rate cuts are also on investors’ minds, with odds of a 25-basis-point trim at the November meeting rising to 63.9%.
Comments from Fed policymakers Raphael Bostic and Neel Kashkari will be closely monitored later today. Meanwhile, a workers’ strike on the East and Gulf coasts entered its third day, with Morgan Stanley economists warning of potential consumer price increases.
In premarket trading, oil stocks were flat despite crude prices rising over 1% due to supply disruption concerns in the Middle East. Levi Strauss plummeted 11.3% after announcing it may sell its underperforming Dockers brand and forecasting lower-than-expected revenue. Tesla dropped 1.7% after reporting weaker-than-expected delivery numbers and discontinuing its most affordable Model 3 sedan in the US.
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