U.S. index futures are little changed in pre-market trading on Thursday amid a rocky start to September. Investors await key labor market data, including jobless claims and the nonfarm payroll report, which could influence the Federal Reserve’s upcoming decisions.
At 5:16 AM, Dow Jones futures (DOWI:DJI) rose 45 points, or 0.11%. S&P 500 futures gained 0.03%, while Nasdaq-100 futures dropped 0.13%. The 10-year Treasury yield stood at 3.767%.
Today’s U.S. economic agenda includes the ADP employment report for July, forecasted at 140,000 new jobs at 8:15 AM, and initial jobless claims for August 31, expected at 225,000. Additionally, at 8:30 AM, revisions on productivity (forecasted at 2.5%) and unit labor costs (0.8%) for Q2 will be released. The ISM services index for August, expected at 51.0%, will be announced at 10:00 AM.
In commodities markets, oil prices rose slightly after hitting multi-month lows due to expectations that OPEC+ may delay its planned production increase for October and a reduction in U.S. stockpiles.
OPEC+ is reconsidering the 180,000-barrel-per-day increase scheduled for October in response to falling prices and weak global demand, particularly in China. Additionally, U.S. crude stockpiles fell by 7.4 million barrels last week, exceeding expectations. However, concerns persist over Chinese demand and economic slowdown, limiting gains.
Citigroup warned that if OPEC+ doesn’t cut production further, oil prices could fall to $60 per barrel by 2025 due to rising supply and weaker demand. Without new cuts, confidence in OPEC+ could diminish, leading to even lower prices.
West Texas Intermediate crude for October rose 0.94% to $69.85 per barrel, while Brent for November gained 1.00% to $73.43 per barrel.
Gold (PM:XAUUSD) rose to around $2,515.52 an ounce as investors awaited U.S. labor data that could influence the next cycle of Federal Reserve rate cuts. Expectations of cuts have recently supported gold, despite stock market volatility heightened by a cooling labor market.
Iron ore fell to its lowest value since 2022 after the China Iron & Steel Association warned mills to be cautious about increasing production. Steel demand remains weak due to China’s real estate crisis, pressuring ore prices. The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) ended the daytime session down 2.58%, at $95.58 per metric ton.
Asia-Pacific markets closed mixed on Thursday. Japan’s Nikkei 225 fell 1.05%, pressured by weaker wage data, while Hong Kong’s Hang Seng dropped 0.24% in the final hour of trading. South Korea’s Kospi declined 0.21%. On the other hand, Australia’s S&P/ASX 200 rose 0.4%, driven by strong export figures. China’s CSI 300 gained 0.17%, with expectations of interest rate cuts for the real estate sector.
Asian investors are expected to sell up to $500 billion in U.S. dollars next year, further pressuring the currency, according to Bloomberg. This movement is driven by large dollar deposits and low hedging, with Japanese insurers reducing their currency coverage.
In Japan, inflation-adjusted wages rose 0.4% in July, driven by summer bonuses, following a 1.1% increase in June. The slowdown is due to fewer companies paying bonuses. Real wage growth depends on regular wage increases, while inflation is expected to remain close to the 2% target.
In China, shares of developers like China Vanke rose on optimism about potential rate cuts to support the real estate sector. Chinese regulators are considering reducing interest rates by up to $5.3 trillion to ease pressure on the banking sector.
In Australia, the government proposed guidelines to protect high-risk AI research and development, including significant human oversight and clear labeling of AI-generated content. The guidelines, released by Minister Ed Husic, will initially be voluntary and could become mandatory after consultations. AI could contribute up to $77.2 billion to the economy by 2030.
In July, the country’s exports rose 0.7% month-on-month, while imports fell 0.8% compared to the previous month.
The Reserve Bank of Australia (RBA) highlighted that it is too early to consider interest rate cuts as inflation remains high. Despite a weak economy and overall inflation falling to 3.5%, the priority remains reducing inflation to the 2-3% target. The RBA has held the interest rate at 4.35% since November.
European markets are showing mixed performance after three consecutive declines, following last week’s record. Sectors are diverging: utilities are up, while the chemical sector is down.
Germany’s largest union, IG Metall, is open to discussing a shorter workweek for Volkswagen AG (TG:VOW3) employees as an alternative to proposed factory closures. Union leader Christiane Benner expressed willingness to negotiate to avoid strikes and maintain job security.
On Wednesday, U.S. stocks fluctuated near flat after Tuesday’s selloff. The Dow Jones rose 0.09%, while the S&P 500 fell 0.16%, and the Nasdaq dropped 0.30%. The market reflected ongoing economic uncertainty, with persistent concerns following weak manufacturing data and a decline in job openings, keeping attention on the possibility of a Federal Reserve rate cut in September.
Additionally, the Labor Department reported a drop in job openings to 7.67 million in July, below expectations of 8.10 million. Among individual stocks, shares of US Steel (NYSE:X) fell 17.5% yesterday after news that Joe Biden is expected to block the company’s $14.1 billion acquisition by Nippon Steel, impacting jobs and the local economy.
Before the market opens, quarterly reports are expected from NIO (NYSE:NIO), FuelCell Energy (NASDAQ:FCEL), Toro (NYSE:TTC), SAIC (NASDAQ:SAIC), Lands’ End (NASDAQ:LE), G-III Apparel Group (NASDAQ:GIII), Korn Ferry (NYSE:KFY), Methode Electronics (NYSE:MEI), Movado Group (NYSE:MOV), and Shoe Carnival (NASDAQ:SCVL).
After the market closes, numbers are expected from Broadcom (NASDAQ:AVGO), UiPath (NYSE:PATH), Samsara (NYSE:IOT), DocuSign (NASDAQ:DOCU), Planet Labs (NYSE:PL), Braze (NASDAQ:BRZE), Quanex Building Products (NYSE:NX), Zumiez (NASDAQ:ZUMZ), Smartsheet (NYSE:SMAR), and Tillys (NYSE:TLYS).