North American stock indices are expected to open lower on Tuesday, with index futures trading down amid cautious sentiment. This comes ahead of a series of key economic reports throughout the week that could influence the Federal Reserve’s monetary policy decisions for the remainder of the year.
On Friday, both the Dow and S&P 500 ended higher, marking their fourth consecutive month of gains, following data that indicated a strong economy coupled with easing price pressures. The Dow has reached a record high, while the S&P 500 is within 1% of its own milestone, despite the traditionally weak performance of major indexes in September.
Traders are awaiting the monthly ISM manufacturing survey, scheduled for release at 3 pm GMT, with expectations that the index will rise to 47.5 but remain in contraction. Additionally, several labour market reports are set to be released this week, culminating in Friday’s non-farm payroll figures from August. The job market has drawn increased attention since July’s report, which showed a more significant slowdown than anticipated and triggered a global selloff in riskier assets.
The Federal Reserve’s upcoming meeting later this month will be closely scrutinised, especially following Chair Jerome Powell’s recent comments supporting potential policy adjustments. The CME Group’s FedWatch Tool currently shows a 69% chance of a 25-basis-point rate cut and a 31% probability for a more substantial 50-basis-point reduction.
In premarket trading, rate-sensitive semiconductor stocks led declines, with Nvidia down 2.3%, Broadcom falling 1.8%, and Advanced Micro Devices losing 1.3%, following a 2.6% rise in the Philadelphia SE Semiconductor index on Friday. Tesla saw a nearly 1% gain after reports revealed plans to produce a six-seat variant of its Model Y in China by late 2025 and record-breaking August sales in the region. Conversely, Boeing dropped 2.6% following a downgrade by Wells Fargo from “equal weight” to “underweight.”
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