(Reuters) – U.S. stock futures fell on Tuesday after weak manufacturing data raised new concerns about the strength of the U.S. economy, even as markets awaited a slew of reports this week to gauge how much growth has slowed.
Stocks fell on Monday after survey data showed US factory activity slowed more than expected in May and construction spending fell in April, although the S&P 500 and Nasdaq ended the session slightly higher.
“It was a day when the theme of American economic exceptionalism was questioned,” Chris Weston, head of research at Pepperstone, said in a note.
Megacap stocks, including Nvidia, Apple, Alphabet and Meta, fell between 0.3% and 0.9% in premarket trading. Gains in these rate-sensitive stocks had boosted the Nasdaq last session as U.S. Treasury yields fell.
Broadly strong corporate earnings, coupled with seemingly resilient economic growth, have kept Wall Street optimistic and stocks supportive in recent months, even as markets have been forced to dial back hopes on both the timing and pace of rate cuts. turn.
However, a series of recent figures indicate the economy is slowing more than expected, raising concerns among investors even as markets expect an earlier start to rate cuts.
Traders now estimate a nearly 62% chance that the Fed will cut rates in September, up from about 53% before the ISM data was released and less than 50% last week, according to the CME’s FedWatch tool.
Several major reports coming out this week are expected to provide a clearer picture of U.S. economic health, especially the labor market. The survey of vacancies and labor turnover is expected later on Tuesday, ahead of the closely watched non-farm payroll figures for May, due on Friday.
Data on factory orders is also expected later in the day and results from services sector surveys are expected on Wednesday.
“The manufacturing report has alerted us that this week’s various employment data and ISM services could all be real market-moving risk events, and the market is likely to be sensitive to any downside surprises,” Weston said.
Monday’s trading was also affected by an outage on the New York Stock Exchange, which caused volatility in dozens of stocks. The NYSE later said the problem had been resolved and the exchanges canceled erroneous trades in the affected stocks, including Class A shares of Berkshire Hathaway.
At 5:51 a.m. ET, the Dow e-minis were up 208 points, or 0.54%, the S&P 500 e-minis were up 31.5 points, or 0.59%, and the Nasdaq 100 e-minis were up 112 points , or 0.60%, lower.
Among individual movers, Intel gained 2.3% after the company launched its next-generation Xeon server processors and priced its Gaudi 3 artificial intelligence accelerator chips lower than its rivals’ products.
Software coding platform GitLab fell 3.5% after predicting weaker-than-expected second-quarter revenue late Monday.
(Reporting by Lisa Mattackal in Bengaluru; Editing by Pooja Desai)
