Wall Street opens lower on growth concerns ahead of labor data

By Johann M Cherian and Purvi Agarwal

(Reuters) -Wall Street's main indexes were set to open lower on Wednesday, as fresh worries over the health of the U.S. economy kept investors on the sidelines in the run-up to labor data.

In the previous session, the indexes had logged their biggest one-day loss since early August as investors dumped technology-related stocks in a dour start to September.

Since 1928, the benchmark S&P 500 has recorded losses of about 1.2% on average in the historically weak month for U.S. equities.

"You've got a market that is as nervous as it often gets in September, but we're not looking at back-to-back large down days," said Art Hogan, chief market strategist at B Riley Wealth.

The risk-off mood was exacerbated by data that showed manufacturing activity shrank, nearly a month after signs of softening labor demand sparked a global market rout.

"The manufacturing impact on the U.S. economy often gets overstated. It's more important to focus on things like the labor market and investors will lean a lot more into those data points," Hogan said.

Traders now await July's Job Openings and Labor Turnover Survey at 10 a.m. ET and non-farm payrolls report on Friday, which could offer clues on the size of the Federal Reserve's expected interest-rate cut in September.

Markets expect a 59% chance of a 25 basis points cut, according to CME Group's (NASDAQ:CME ) FedWatch Tool, while that of a 50 bps cut has increased to 41% from around 31% a day earlier.

Data on July factory orders and the Fed's survey, known as the "Beige Book", are also expected on Wednesday.

At 08:34 a.m. ET, Dow E-minis were down 72 points, or 0.18%, S&P 500 E-minis were down 23.25 points, or 0.42% and Nasdaq 100 E-minis were down 143.25 points, or 0.75%.

Chip stocks fell in the previous session, with the Philadelphia SE Semiconductor index falling 7.8% to its steepest one-day drop since the COVID-19 pandemic.

Nvidia (NASDAQ:NVDA ) fell 2% in premarket trading after a report said the U.S. Department of Justice sent a subpoena to the AI chip firm as it deepens its probe into the company's antitrust practices.

A 10% slump in the previous session had wiped off a record $279 billion from Nvidia's market capitalization - the biggest ever single-day decline in market value for a U.S. company.

Other growth stocks such as Tesla (NASDAQ:TSLA ) fell 1%, while Apple (NASDAQ:AAPL ) and Microsoft (NASDAQ:MSFT ) slipped 0.8% each.

Among others, Advanced Micro Devices (NASDAQ:AMD ) rose 1.7% after the chipmaker appointed former Nvidia executive Keith Strier as senior vice president of global AI markets.

Zscaler (NASDAQ:ZS ) forecast fiscal 2025 revenue and profit below estimates, sending the cybersecurity company's shares down 17.4%.



Dollar Tree (NASDAQ:DLTR ) slumped 10.4% after the discount store operator trimmed its annual sales and profit forecasts, while - Skippy peanut butter maker Hormel Foods (NYSE:HRL ) slid 6.6% after it lowered its annual sales view.

Intel (NASDAQ:INTC ) slipped 2.8%. A report showed the chipmaker's contract manufacturing business suffered a setback after tests with chipmaker Broadcom (NASDAQ:AVGO ) failed.

Source: Investing.com