(Reuters) – U.S. stock index futures traded lower on Tuesday as caution prevailed ahead of a slew of economic data reports due during the week that could influence the extent of monetary easing policy by the Federal Reserve this year.
The blue-chip Dow Jones and benchmark S&P 500 recovered from early August losses to end higher on Friday, posting their fourth straight month of gains as data pointed to a robust economy and easing price pressures.
The Dow Jones is at an all-time high and the S&P 500 is within 1% of its own milestone as markets enter a historically weak month for the major indexes on average.
Traders continue to look for reassuring signals on the economy, with the release of the monthly ISM manufacturing survey at 10am ET. Economists predict that the manufacturing index will rise to 47.5, but remains in contraction territory.
A number of labor market figures will also be analyzed during the week, ahead of Friday’s non-farm wage figures of the previous month. The labor market has come under increased scrutiny after the July report hinted at a bigger-than-expected slowdown, resulting in a global sell-off of riskier assets.
The central bank’s meeting later this month will be closely watched, following Chairman Jerome Powell’s recent support for upcoming policy adjustments. According to CME Group’s FedWatch Tool, the probability of a 25 basis point rate cut is 69%, while the probability of a larger 50 basis point cut is 31%.
At 5:30 a.m. ET, the Dow E-minis were down 178 points, or 0.43%, the S&P 500 E-minis were down 30 points, or 0.53%, and the Nasdaq 100 E-minis were down 161 points, or 0.83%. .
Rate-sensitive chip stocks led premarket declines, with Nvidia down 2.3%, Broadcom down 1.8% and Advanced Micro Devices down 1.3%, following the Philadelphia SE Semiconductor’s 2.6% rise index on Friday.
Tesla added nearly 1%, in part, after a report showed it plans to produce a six-seat variant of its Model Y car in China from late 2025. In addition, the automaker’s sales in China recorded their best month of the year so far in 2025. August.
Boeing lost 2.6% after broker Wells Fargo downgraded the aircraft manufacturer from ‘equal weight’ to ‘underweight’.
US Steel fell 5% after Democratic presidential candidate Kamala Harris expressed her concerns about the takeover of the steel company by Japan’s Nippon Steel.
(Reporting by Johann M Cherian in Bengaluru; Editing by Shounak Dasgupta)