U.S. stock futures were mixed early Tuesday as investors returned from the Labor Day holiday and assessed higher oil prices, recent employment data and expectations for the Federal Reserve’s September policy meeting.
Dow Jones Futures fell 0.8% to 53,034.0 points by 03:13 ET (07:13 GMT), while S&P 500 Futures declined 0.2% to 7,704.75 points. Nasdaq 100 Futures moved in the opposite direction, rising 0.2% to 29,609.75 points.
U.S. markets were closed on Monday for Labor Day, leaving investors to respond to Friday’s employment report alongside developments in the Middle East.
Markets Increase Expectations for September Fed Rate Hike
U.S. employers added 162,000 jobs in August, exceeding economists’ expectations, while the unemployment rate remained at 4.1%.
Following the report, futures markets were pricing an approximately 60% probability of a 25-basis-point interest-rate increase at the Federal Reserve’s Sept. 15-16 meeting, according to CME FedWatch. That compared with a probability of 49% before the employment data.
UBS revised its monetary policy forecast on Monday and now expects two Federal Reserve rate increases during 2026, one in September and another in December. The bank had previously expected rates to remain unchanged this year.
These forecasts and market-implied probabilities represent expectations rather than established future policy decisions.
U.S. Inflation Data in Focus
Investors are awaiting further inflation data later this week, with producer prices scheduled for Thursday and consumer prices due on Friday.
The figures will provide additional information on inflation ahead of the Federal Reserve’s September meeting and could influence market expectations for the central bank’s next policy decision.
Higher energy prices have also returned to focus as investors assess the inflation outlook.
Brent crude traded around $97 a barrel on Tuesday amid escalating tensions between the United States and Iran and concerns about potential disruption to energy supplies through the Strait of Hormuz.
Iran has threatened retaliation against regional energy infrastructure following U.S. strikes on Iranian vessels, while reports of attacks on Saudi Arabia’s Jazan refinery added to concerns about energy supplies.
Sustained increases in energy prices could add to inflationary pressures, although their eventual effect on Federal Reserve policy will depend on economic data and policymakers’ assessment.
Wall Street Closed Lower on Friday
Major U.S. equity indices ended Friday’s session lower following the August employment report.
The Dow Jones Industrial Average declined 0.5%, while the S&P 500 fell 0.4% and the Nasdaq Composite lost 0.3%.
Markets are now assessing the combination of upcoming inflation data, developments in energy markets and expectations for the Federal Reserve’s Sept. 15-16 meeting.