Job openings survey ahead, Powell rate commentary - what's moving markets

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Investing.com -- US stock futures drifted lower ahead of a series of crucial economic data releases this week, with job openings and manufacturing figures highlighting the agenda on Tuesday. Markets were also digesting comments from Federal Reserve Chair Jerome Powell, who suggested that the central bank is not in a rush to slash interest rates.

1. Futures point lower

US stock futures pointed lower on Tuesday, as investors begin the final quarter of the calendar year awaiting an incoming raft of economic data and parsing through comments from Federal Reserve Chair Jerome Powell.

By 03:28 ET (07:28 GMT), the Dow futures contract had slipped by 112 points or 0.3%, S&P 500 futures had dipped by 11 points or 0.2%, and Nasdaq 100 futures had shed 34 points or 0.2%.

The benchmark S&P 500 ended at a fresh record high on Monday, recovering from a temporary dip sparked by Powell's statement that the Fed is in no rush to roll out more interest rate reductions following a jumbo 50-basis point cut last month (more below).

Meanwhile, the 30-stock Dow Jones Industrial Average also registered a new all-time peak and the tech-heavy Nasdaq Composite gained 70 points or 0.4%. All three of the main averages on Wall Street advanced in both September and the third quarter.

"[T]here was a lot of news on Monday, [...] although the overall narrative didn’t change a whole lot, and activity was fairly subdued as investors sit back and prepare for key Oct[ober] economic data in the coming days," analysts at Vital Knowledge said in a note to clients.

2. Job openings, ISM manufacturing PMI ahead

Traders are gearing up for the first batch of fresh US economic data this week, which could provide a glimpse into the state of the world's largest economy and influence how the Fed approaches more potential rate cuts this year.

On Tuesday, the closely-monitored Job Openings and Labor Turnover Survey, or JOLTS report, is expected to show that there were 7.640 million available roles in August.

The mark would be slightly lower the one in July, when job openings in the US fell to a three-and-a-half year low of 7.673 million. The reading, a proxy for labor demand, and other figures showing that hiring edged up and layoffs remained relatively subdued, indicated an orderly easing in the jobs market.

Elsewhere, investors will also be scrutinizing the September reading of the Institute for Supply Management's manufacturing and services purchasing managers' indices this week for further signals on the momentum of the American economy.

The ISM manufacturing PMI, due out on Tuesday, is seen coming in at 47.6, up from 47.2 in August but still below the 50-point mark separating contraction from expansion. Non-manufacturing PMI on Oct. 3 is tipped to inch up to 51.6 from 51.5 in the prior month.

Analysts at Bank of America (NYSE:BAC) predicted in a recent note that the data will suggest that broader economic activity in the US is "cooling, not crumbling."

3. Powell says Fed officials are in no hurry to cut rates further

Fed Chair Jerome Powell signaled Monday that the Fed would likely opt for more traditional quarter-point interest rate cuts moving forward, but stressed that the future path of borrowing costs is not on a preset course.

Powell added that the rate-setting Federal Open Market Committee is not "in a hurry to cut rates quickly" despite announcing an outsized cut at its Sept. 17-18 gathering.

He defended the decision, saying it reflected the FOMC's "growing confidence that, with an appropriate recalibration of our policy stance, strength in the labor market can be maintained in a context of moderate economic growth and inflation moving sustainably down to 2%."

Powell argued as well that the overall economy remains in "solid shape" and he vowed to "use our tools to keep it there." He told the crowd in Tennessee that "two more cuts" -- worth a total of half a percentage point -- would be warranted by the end of 2024 "if the economy evolves as expected."

4. 23andMe CEO no longer open to third-party takeover bids - filing

23andMe (NASDAQ:ME) CEO Anne Wojcicki has ruled out the possibility that the DNA testing group would no longer be open to third-party takeover offers, according to a regulatory filing on Monday.

Instead, Wojcicki said she believes "the best path forward" for the company would be for her to take it private.

The statement comes after all seven of the independent directors on the board of 23andMe resigned last month over a stalled management buyout proposal made by Wojcicki earlier this year.

Wojcicki's bid would have taken the firm private and seen her acquire all the shares she does not own for a price of $0.40 a share. Wojcicki had said she would be open to considering outside bids while the deal was being evaluated.

5. Oil edges down

Oil prices slipped on Tuesday as concerns over tepid demand growth offset worries that escalating tensions in the Middle East could hit global supply.

By 03:25 ET, the Brent contract dropped 0.8% to $71.13 per barrel, while U.S. crude futures (WTI) traded 0.9% lower at $67.59 per barrel.

Israel said early on Tuesday that its troops had begun "limited" raids against Hezbollah targets in the border area of Lebanon, a move that risks escalating a conflict in the oil-rich Middle East that threatens to suck in the U.S. and Iran.

Brent ended September down 9%, its third month of declines and largest monthly drop since November 2022. It also slumped 17% in the third quarter for its biggest quarterly loss in a year. WTI fell 7% last month and dropped 16% for the quarter.