By Johann M Cherian and Sukriti Gupta
Wall Street’s major indices are expected to open quietly on Wednesday as investors digest disappointing jobs data and consider a report suggesting President-elect Donald Trump is contemplating declaring a national economic emergency.
According to data at 8:53 a.m. ET, Dow E-minis were down 8 points, or 0.02%, S&P 500 E-minis were down 2.5 points, or 0.04%, and Nasdaq 100 E-minis were down 21.75 points, or 0.10%. Futures recovered slightly after the ADP National Employment Report revealed an increase of 122,000 private payrolls last month, below economists’ expectations of 140,000.
A separate report from the Labor Department showed a decline in jobless claims to 201,000 in the previous week, lower than the anticipated 218,000. The focus this week will be on the upcoming non-farm payrolls data release on Friday.
Sam Stovall, chief investment strategist at CFRA, noted the conflicting nature of the reports, stating, “It seems as if one report is contradicting the other. The reduction in jobless claims implies that more people are finding work, whereas the ADP number shows fewer people were hired than expected.” Market futures are wavering as investors interpret the implications for Friday’s payroll figures.
In premarket trading, megacap stocks showed mixed performance. Nvidia gained 1%, Alphabet fell 1.8%, and Meta remained stable. The yield on the 10-year Treasury bond, reaching 4.7%, was at its highest level in eight months, easing some pressure on equities.
Traders now anticipate the Federal Reserve to implement at least two interest rate cuts this year, compared to previous expectations of one. The first cut is anticipated in either May or June, according to the CME Group’s FedWatch Tool. Fed governor Christopher Waller suggested that falling inflation could prompt further interest rate reductions, albeit at an uncertain pace.
Market sentiment was unsettled following reports that Trump is considering utilizing the International Economic Emergency Powers Act to establish a new tariff program. Concerns about potential trade tensions and inflationary pressures stemming from Trump’s policies have kept investors on edge ahead of the inauguration later this month.
Furthermore, Wall Street closed lower on Tuesday after strong labor market data and positive services activity. The S&P 500 and Nasdaq experienced their largest daily declines since the Fed’s cautious stance on interest rate cuts in December. Notable moves included Advanced Micro Devices falling 1.9% after a downgrade from HSBC, and quantum-computing stocks such as Rigetti Computing, IonQ, and Quantum Computing declining significantly following comments from Nvidia’s CEO.
Barclays’ upgrade of Tapestry to “overweight” from “equal weight” helped the luxury name rise 1.1%. Markets will be closed on Thursday as a day of national mourning is observed in
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