U.S. stock futures stumble as investors turn cautious amid ‘September blues’

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U.S. stock futures stumble as investors turn cautious amid ‘September blues’


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Time (CDT)4:008:0011 Sep4:008:0012:00





U.S. stock futures pointed to a softer start for Wall Street on Tuesday, as investors struggled to find fresh catalysts to drive the market higher, choosing instead to focus on simmering trade worries.

How did the main benchmarks fare?

Dow Jones Industrial Average futures YMU8, -0.37%  fell nearly 100 points, or 0.4%, to 25,806, while S&P 500 futures ESU8, -0.22%  dropped 6.8 points, or 0.2%, to 2,873.75. Nasdaq-100 futures NQU8, -0.22%  fell 17.25 points, or 0.2%, to 7,443.75.

On Monday, the S&P 500 SPX, +0.19% rose 0.2% to finish at 2,877.13 and the Nasdaq Composite Index COMP, +0.27% added 0.3%, to 7,924.16, with both indexes halting a four-day losing streak. The Dow Jones Industrial AverageDJIA, -0.23% fell 0.2% to 25,857.07.

Last week was the S&P’s first negative week of the past four, marking the biggest weekly percentage drop since June, while the Nasdaq suffered its biggest weekly drop since March.

What drove the market?

Trade issues were simmering below the surface, as investors continued to watch the situation between the U.S. and China after President Donald Trump recently threatened China with fresh tariffs. The latest move by Trump would impact an additional $267 billion in Chinese goods, coming on top of an already-proposed $200 billion in tariffs. China has vowed to retaliate.

Meanwhile, China plans to ask the World Trade Organization next week for permission to impose sanctions on the U.S. for Washington’s noncompliance with a ruling in a dispute over U.S. dumping duties, Reuters reported. That’s part of a dispute that goes back to 2013.

Investors are worried about a full-on trade war that could have negative implications for global economic growth.

EU and U.S. negotiators met Monday to talk over a pact that would avoid a trans-Atlantic spat. Although there was no major breakthrough, U.S. Trade Representative Robert Lighthizer and European Trade Commissioner Cecilia Malmström said they would meet up again by the end of September and begin hammering out a deal in the coming months.

As well, investors were up against some history as the month of September is historically the weakest of the year, with an average loss of 1.05% since 1896.

Opinion: Resist the urge to sell if another 9/11-scale attack sinks the stock market

What are strategists saying?

“This market is still waiting for the ‘other shoe to drop’ in the Sino-U. S trade dispute after President Trump signaled late last week that he is ready to impose tariffs on even more goods,” Dean Popplewell, vice president of market analysis at OANDA.

“Traditionally it is a weak month as some companies close their fiscal year, Combined with trade and geopolitical problems (Syria), and the Fed watch have put investors in a cautious mood ignoring the good fundamental news of the economy,” said Peter Cardillo, chief market economist at Spartan Capital Securities, in emailed comments.

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Which stocks are in focus?

Shares of Integrated Device Technology Inc. IDTI, +10.98%  surged 15% in premarket after Japan’s Renesas Electronics Corp. said it would buy the California-based chip maker in a $6.7 billion deal.

Sonos Inc. SONO, -13.61%  shares fell 14% in premarket trading after the speaker maker’s first earnings report since its initial public offering showed a net loss and sales that were worse than those reported in the same quarter a year ago. The speaker maker’s stock had rallied into the release, soaring 13% in Monday’s session.

Which economic reports are in focus?

The National Federation of Independent Business’s small business optimism index will be released ahead of the open, followed by job openings and wholesale inventories for July at 10 a.m. Eastern Time. Fed governor Lael Brainard and Minneapolis Federal Reserve President Neel Kashkari will speak on a panel about government-sponsored enterprises and housing in the financial crisis at 2:20 p.m. Eastern.

What are other markets doing?

Stocks in Asia had a mostly weaker day with the exception of Japan’s Nikkei 225 index NIK, +1.30% while European stocks SXXP, -0.31%  were sliding into the red along with U.S. stock futures.

Oil futures CLV8, +0.31% were higher, while gold GCZ8, -0.07% and the dollar index DXY, +0.10%  were softer.

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