Market Analysis

US equity futures were lower on Tuesday, with S&P 500 futures down 0.17% at 5,638.70 and Nasdaq 100 futures falling 64 points, or 0.32%, to 19,511.10.

As of 00:01 EST (04:01 GMT), the Dow Jones Industrial Average was down 0.20% at 41,840.00, while the U.S. Dollar Index increased 0.1% to 101.67. The 10-Year Treasury yield was at 3.914%.

The U.S. ISM manufacturing survey data is scheduled for release later today, marking the first major economic indicator of a week packed with U.S. data.

Attention shifts to labor market Investors are focusing on a critical week for the US markets, with heightened anticipation for upcoming labor market data. The previous month’s labor report missed expectations, leading to a sell-off in risk assets that was triggered by the prior day's disappointing ISM Manufacturing PMI.

Discussions about the subpar labor figures have highlighted Hurricane Beryl as a significant factor. Despite the Bureau of Labor Statistics (BLS) indicating that the hurricane, which impacted Texas during the survey week of the July employment report, had "no discernible effect" on employment data, the household survey showed a different story.

It revealed that 436,000 individuals were unable to work due to adverse weather conditions, a record high for July. Additionally, 249,000 people were reported to be on temporary layoff during the same period.

This rise in unemployment is largely attributed to these temporary layoffs. Market participants are eager to see if the July data was indeed influenced by these transient factors.

The Federal Reserve, which closely monitors labor market conditions, will use the upcoming report to decide the extent of the interest rate cut at their next meeting, with possibilities ranging from a 25 basis point (bps) to a 50-bps reduction.

Paraphrasing text from "Investing" all rights reserved by the original author.