U.S. stock futures pointed to a third consecutive day of losses on Wall Street as investors analyzed a mix of corporate news and prepared for a significant release of economic data. S&P 500 E-Mini futures fell by 0.28%, while Nasdaq 100 E-Mini futures declined by 0.40% in early trading, reflecting caution ahead of key reports and speeches from Federal Reserve officials.
Key Takeaways
- U.S. stock futures are down, signaling continued market weakness before the opening bell.
- Investors are awaiting the final Q2 U.S. GDP estimate, durable goods orders, and jobless claims data.
- Several Federal Reserve officials are scheduled to speak, which could provide new insights into monetary policy.
- Corporate movers include Freeport-McMoRan, which fell sharply, and Marvell Technology, which rose on a stock buyback plan.
- Global markets showed mixed results, with European stocks declining while Japan's Nikkei reached a new high.
Wall Street Navigates Corporate and Economic Headwinds
The previous trading session saw Wall Street's main indexes close in negative territory, driven by significant moves in individual stocks. Mining giant Freeport-McMoRan (FCX) experienced a steep decline of nearly 17%, making it the largest percentage loser on the S&P 500. The drop followed the company's decision to lower its third-quarter sales forecast for copper and gold and declare force majeure at its Grasberg mine in Indonesia.
Other notable decliners included Bloom Energy (BE), which fell more than 10% after Jefferies downgraded the stock to "Underperform." Adobe (ADBE) also saw its shares decrease by over 2% following a downgrade from Morgan Stanley to "Equal Weight."
On the positive side, semiconductor firm Marvell Technology (MRVL) was a standout performer, gaining over 7%. The rally was fueled by the announcement of a new $5 billion share repurchase program authorized by its board, signaling confidence in the company's financial health.
Housing Market Surprise
Economic data from Wednesday showed an unexpected surge in U.S. new home sales, which jumped 20.5% month-over-month in August to a 3-1/2-year high of 800,000. This figure significantly surpassed economists' expectations of 650,000.
Federal Reserve Commentary and Rate Cut Expectations
Market sentiment is also being shaped by comments from policymakers regarding the future of interest rates. U.S. Treasury Secretary Scott Bessent expressed disappointment on Wednesday that Federal Reserve Chair Jerome Powell has not provided a clear timeline for lowering rates. "Rates are too restrictive; they need to come down," Bessent stated in a television interview.
"I’m a bit surprised that the chair hasn’t signaled that we have a destination before the end of the year of at least 100 to 150 basis points." - Scott Bessent, U.S. Treasury Secretary
Echoing a cautious approach, San Francisco Fed President Mary Daly acknowledged that more interest rate cuts would likely be necessary. However, she emphasized that policymakers should proceed carefully to balance price stability with support for the labor market.
Current market pricing reflects a high probability of a rate adjustment soon. According to U.S. rate futures, there is a 91.9% chance of a 25 basis point rate cut at the Federal Reserve's October meeting.
Key Economic Data on the Horizon
Investors are closely watching for a series of economic reports scheduled for release today, which will provide a clearer picture of the U.S. economy's health. The main focus is on the Commerce Department’s final estimate for second-quarter gross domestic product (GDP), with economists forecasting an annual expansion rate of 3.3%.
Data Points to Watch:
- Durable Goods Orders (August): Expected to drop by -0.3% month-over-month.
- Core Durable Goods Orders (August): Forecasted to fall by -0.1% month-over-month.
- Existing Home Sales (August): Economists predict a figure of 3.96 million.
- Initial Jobless Claims: Expected to come in at 233,000, slightly up from the previous week.
Adding to the day's events, several Fed officials are scheduled to speak, including Austan Goolsbee, John Williams, and Michelle Bowman. Their remarks will be scrutinized for any new clues about the central bank's policy direction.
Upcoming Earnings Reports
The corporate earnings calendar remains active, with several major companies set to report their quarterly results. Notable reports expected today include Costco (COST), Accenture (ACN), Jabil Circuit (JBL), and CarMax (KMX).
Global Market Performance
European markets were trading lower, with the Euro Stoxx 50 Index down 0.49%. The decline was led by weakness in healthcare and construction sectors. Shares of Siemens Healthineers AG fell over 4% after the U.S. Commerce Department launched national security investigations into imports of certain medical equipment. In contrast, shares of H&M surged more than 9% after the fashion retailer exceeded third-quarter profit expectations.
Asian markets closed with mixed results. Japan's Nikkei 225 Stock Index gained 0.27%, reaching a new record high as a weaker yen supported export-oriented companies. In China, the Shanghai Composite Index finished nearly flat amid thin trading volumes ahead of a national holiday. Chinese automaker BYD saw its stock rise over 1% after data showed its new car sales in the EU tripled in the last month, surpassing its U.S. competitor, Tesla.
Pre-Market Stock Movers in the U.S.
Several U.S. stocks were active in pre-market trading, indicating potential volatility at the market open.
- Intel (INTC): Rose over 3% after Seaport Research upgraded the stock to Neutral from Sell. Reports also surfaced that the chipmaker had approached Apple about a potential investment.
- Opendoor Technologies (OPEN): Climbed more than 7% after investment firm Jane Street disclosed a 5.9% stake in the company.
- Oracle (ORCL): Fell over 2% after Rothschild & Co. initiated coverage with a Sell rating.
- Chip Stocks: Other semiconductor companies like Qualcomm (QCOM) and Micron Technology (MU) were down nearly 2%.
- Crypto-Exposed Stocks: Companies with exposure to cryptocurrencies, including Coinbase (COIN) and MARA Holdings (MARA), were trading lower as the price of Bitcoin declined.
