Futures Pointing To Roughly Flat Open On Wall Street

The major U.S. index futures are currently pointing to a roughly flat open on Tuesday, with stocks likely to show a lack of direction after ending Monday’s choppy trading session mostly higher.

Uncertainty about the near-term outlook for the markets may keep some traders on the sidelines following a strong September, which is historically a weak month for stocks.

Traders may also be reluctant to make significant moves in early trading ahead of the release of the Institute for Supply Management’s report on manufacturing activity in the month of September.

The report, which is due to be released shortly after the start of trading, is expected to show the ISM’s manufacturing PMI inched up to 47.5 in September from 47.2 in August. A reading below 50 would still indicate contraction.

The Labor Department is also due to release its report on job openings in the month of August. Job openings in August are expected to come in unchanged from July at 7.67 million.

Later in the week, the Labor Department’s closely watched monthly jobs report is likely to be in the spotlight, as traders look for additional clues about the outlook for the economy and interest rates.

Economists currently expect the report to show employment rose by 140,000 jobs in September after climbing by 142,000 jobs in August, while the unemployment rate is expected to hold at 4.2 percent.

Stocks showed a lack of direction over the course of the trading session on Monday before eventually ending the day mostly higher. The major averages all finished the day in positive territory following the mixed performance seen last Friday.

The Dow inched up 17.15 points or less than a tenth of a percent to a new record closing high of 42,330.15, while the Nasdaq climbed 69.58 points or 0.4 percent to 18,189.17. The S&P 500 also rose 24.31 points or 0.4 percent to a new record closing high of 5,762.48.

Stocks initially came under pressure in reaction to remarks by Federal Reserve Chair Jerome Powell before rebounding going into the close.

The Fed chief suggested the central bank will continue to lower interest rates but stressed the downward path for rates is not on a preset course.

Powell said the decision to slash rates by half a percentage point earlier this month reflects the Fed’s growing confidence that an appropriate recalibration of monetary policy will maintain strength in the labor market and keep inflation moving sustainably down to the 2 percent target.

“Looking forward, if the economy evolves broadly as expected, policy will move over time toward a more neutral stance,” Powell said.

“But we are not on any preset course,” he continued. “The risks are two-sided, and we will continue to make our decisions meeting by meeting.”

Powell’s remarks partly offset optimism the Fed will continue to lower interest rates aggressively in the coming months.

The Fed’s next monetary policy meeting is scheduled for November 6-7, with CME Group’s FedWatch Tool currently indicating a 65.3 percent chance the central bank will lower rates by 25 basis points and a 34.7 percent chance of another 50 basis point rate cut.

Despite the advance by the broader markets, most of the major sectors ended the day showing only modest moves.

Gold stocks saw considerable weakness, however, with the NYSE Arca Gold Bugs Index tumbling by 2.1 percent. The weakness among gold stocks came amid a decrease by the price of the precious metal.

Telecom and semiconductor stocks also saw some weakness on the day, while airline and biotechnology stocks moved to the upside.

Commodity, Currency Markets

Crude oil futures are sliding $0.83 to $67.34 a barrel after edging down $0.01 to $68.17 a barrel on Monday. Meanwhile, after slipping $8.70 to $2,659.40 an ounce in the previous session, gold futures are climbing $17.40 to $2,676.80 an ounce.

On the currency front, the U.S. dollar is trading at 143.74 yen compared to the 143.63 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1074 compared to yesterday’s $1.1135.

Asia

Asian stocks ended mixed on Tuesday and the dollar rose after Federal Reserve Chair Jerome Powell hinted at smaller rate cuts. Geopolitical tensions also weighed after Israel launched ground operations in southern Lebanon.

Oil prices fell nearly 1 percent in Asian trading as demand worries overshadowed signs of escalating Middle East tensions.

Gold edged up slightly but hovered below recent record highs ahead of U.S. labor market data due this week that could offer more clarity on the pace of U.S. rate cuts.

Mainland Chinese markets were closed for a week starting today for the National Day holidays. Hong Kong markets were also closed but will reopen on Wednesday. South Korean markets were closed for Armed Forces Day.

Japanese markets bounced back as the yen extended losses for a second day running and the BoJ Summary of Opinions indicated no immediate plans for further rate hikes. A key survey also showed that big manufacturer sentiment held steady in the third quarter.

The Nikkei 225 Index jumped 1.9 percent to 38,651.97 after plunging 4.8 percent on Monday. The broader Topix Index settled 1.7 percent higher at 2,690.78.

Heavy machinery maker Kawasaki Heavy Industries surged 8.3 percent and Mitsubishi Heavy Industries rallied 7.8 percent as Japan’s parliament formally elected former defense minister Shigeru Ishiba as the country’s new prime minister.

Automakers Honda Motor, Toyota and Nissan all rose around 2 percent on the back of a weaker yen. Chip-related heavyweights Advantest and Tokyo Electron climbed 2-3 percent.

Australian markets fell notably, with miners and banks leading losses. The benchmark S&P/ASX 200 Index dropped 0.7 percent to 8,208.90, while the broader All Ordinaries Index ended down 0.7 percent at 8,481.90.

Investors reacted to mixed economic data, with retail sales rebounding by more than expected in August while the manufacturing sector’s deterioration worsened in September.

Qantas Airways tumbled 3.4 percent after an announcement that it will buy a 25 percent stake in Virgin Australia from U.S. private equity firm Bain Capital.

REA Group shares jumped 4.9 percent after the property-listing firm said it would no longer seek to buy British property portal Rightmove.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index rose 0.4 percent to 12,466.69.

Europe

European stocks have moved mostly higher on Tuesday after flash data from Eurostat showed Eurozone inflation eased more than expected in September.

The harmonized index of consumer prices posted an annual increase of 1.8 percent compared to a 2.2 percent rise in August. Economists had forecast inflation to moderate to 1.9 percent.

The euro area inflation rate will stabilize at the ECB’s 2 percent target during the course of 2025, Finnish ECB policymaker Olli Rehn said in a speech earlier today.

Meanwhile, investors shrugged off final estimates from S&P Global and Hamburg Commercial Bank (HCOB) that revealed manufacturing activity across the euro zone declined at its fastest pace this year in September.

While the French CAC 40 Index is up by 0.1 percent, the German DAX Index and the U.K.’s FTSE 100 Index are both up by 0.6 percent.

In corporate news, Mulberry Group shares have risen. The British luxury handbag maker has rejected a conditional bid from Mike Ashley’s Frasers Group after consulting with its financial and legal advisers and the majority shareholder Challice Limited.

Covestro AG shares have also jumped as Abu Dhabi’s state oil firm ADNOC announced it will buy the German chemicals producer in a 14.7-billion-euro deal ($16.4 billion).

The agreement stipulates that the bidder will make a public takeover offer for all outstanding shares of Covestro at a price of 62.00 euros per share.

Meanwhile, Greggs has slumped after the bakery chain reported a slowdown in underlying sales growth during its most recent quarter.

Shares of iomart Group have also moved sharply lower after the Scottish IT company warned on first half and fiscal 2025 results.

U.S. Economic News

At 10 am ET, the Institute for Supply Management is scheduled to release its report on manufacturing activity in the month of September.

The ISM’s manufacturing PMI is expected to inch up to 47.5 in September from 47.2 in August, but a reading below 50 would still indicate contraction.

The Labor Department is also due to release its report on job openings in the month of August at 10 am ET. Job openings in August are expected to come in unchanged from July at 7.67 million.

Also at 10 am ET, the Commerce Department is schedule to release its report on construction spending in the month of August. Construction spending is expected to tick up by 0.1 percent in August after falling by 0.3 percent in July.

Atlanta Federal Reserve President Raphael Bostic is due to give welcome and opening remarks before the “Technology-Enabled Disruption: Implications of AI, Big Data, and Remote Work” conference at 11 am ET.

At 11:10 am ET, Bostic scheduled to moderate a session with Federal Reserve Board Governor Lisa Cook at the conference.

Bostic, Richmond Fed President Thomas Barkin and Boston Fed President Susan Collins a due to participate in “A Conversation with the Federal Reserve Presidents” before the conference at 6:15 pm ET.

Stocks In Focus

Shares of Ford (F) are seeing notable pre-market strength after Goldman Sachs upgraded its rating on the automaker’s stock to Buy from Neutral.

Google parent Alphabet (GOOGL) may also move to the upside after Pivotal initiated coverage of the company’s stock with a Buy rating.

On the other hand, shares of HP Inc. (HPQ) may see initial weakness after Citi downgraded its rating on the information technology company’s stock to Neutral from Buy.