Wall Street dipped modestly lower in the early going Tuesday as markets await an assortment of employment data of great interest to the Federal Reserve as it sets its sights on keeping the U.S. economy healthy and growing.
Futures for the S&P 500 were down less than 0.1% before the bell, while futures for the Dow Jones Industrial Average edged 0.2% lower.
Wall Street has catapulted to records recently on hopes the slowing U.S. economy can keep growing while the Federal Reserve cuts interest rates to offer it more juice. A big test will arrive Friday, when the U.S. government offers its latest monthly update on the job market.
Coming later Tuesday is the latest data on job openings, with the latest jobless claims report to be issued on Thursday.
With inflation largely tamed, Fed officials have turned their focus to a labor market that has cooled significantly this year, in part due to elevated interest rates. The Fed cranked up rates beginning in 2022 in an effort to corral inflation, which took longer than most expected.
Fed officials cut the central bank's benchmark lending rate two weeks ago as they try to pull off the elusive soft landing: bringing down inflation by cooling a red-hot economy without causing a recession. Economists are expecting more rate cuts before the end of the year, though Fed Chair Jerome Powell on Monday said rate cuts would come at a measured pace after its bigger-than-expected half-point cut earlier this month.
Investors were also monitoring a strike by dockworkers at 36 ports from Maine to Texas. The work stoppage has the potential to snarl supply chains and lead to shortages and higher prices if it stretches on for more than a few weeks.
Workers began walking picket lines early Tuesday in a strike over wages and automation. The contract between the ports and about 45,000 members of the International Longshoremen’s Association expired at midnight.
Supply chain experts say consumers won’t see an immediate impact from the strike because most retailers stocked up on goods, moving ahead shipments of holiday gift items.
In Europe, markets were broadly higher after a report showed that inflation in the 20 countries that use the euro fell to 1.8% in September. It's the first time in more than three years that the figure has come in below the European Central Bank’s target of 2%.
Tuesday’s official figure, coupled with an anemic growth outlook, could pave the way for faster interest rate cuts from the ECB, which has already trimmed rates twice.
At midday, France’s CAC 40 was unchanged, while Germany’s DAX added 0.4% and London's FTSE 100 gained 0.5%.
Farther east, a quarterly “tankan” survey by the Bank of Japan showed business confidence among large manufacturers remained steady at 13, indicating an improved outlook for business conditions. A positive number indicates that more companies maintain an optimistic outlook on business conditions than those who feel pessimistic.
The survey is closely monitored for clues about the impact of the Bank of Japan’s interest rate decisions, especially after the central bank ended negative rates in March and raised its short-term rate to 0.25% in July.
Japan also reported that its unemployment rate for August fell to 2.5% from 2.7% in July, in line with market expectations.
Japan’s benchmark Nikkei 225 rallied 1.9% to close at 38,651.97 as the yen weakened. The dollar was trading at 143.72 yen, up from 143.62 yen.
Australia’s S&P/ASX 200 dipped 0.7% to 8,208.90 after the data showed that retail sales in August rose 3.1% from the same period last year, which is above expectation.
Markets in China and South Korea were shut for holidays. Mainland Chinese markets, which had their best day since 2008 on Monday, will remain closed until Oct. 7 for the National Day break.
In other dealings Tuesday, benchmark U.S. crude oil lost 50 cents to $67.67 per barrel. Brent crude, the international standard, gave up 42 cents at $71.28 per barrel.
The euro was trading at $1.1085, down from $1.1138.
On Monday, the S&P 500 climbed 0.4% to reach an all-time high at 5,762.48 and clinched its fifth straight winning month and fourth straight winning quarter. The Dow Jones Industrial Average added less than 0.1% to 42,330.15. The Nasdaq composite rose 0.4% to 18,189.17.
