5 things to know before the stock market opens

News of the day for September 3, 2024

US stock futures look down as Nvidia (NVDA) stocks pull markets lower following holiday weekend; Intel (INTC) is preparing to unveil its board on plans to spin off parts of the struggling chipmaker; Volkswagen looks at plant closures as it considers cost-cutting measures amid increasingly competitive environment in Europe; Tesla (TSLA) shares are rising as the electric vehicle maker plans to produce a six-seat Model Y; and China announced it would open a trade investigation with Canadian canola in response to a 100 percent tariff imposed by the North American nation on Chinese-made electric vehicles. Here’s what investors need to know today.

1. US stock futures edge lower after Labor Day weekend

U.S. stock futures are lower in premarket trading after the Labor Day holiday on Monday, with the Dow Jones Industrial Average, S&P 500 and Nasdaq all down less than 1 percent. The pre-market drop comes after both the Nasdaq and S&P 500 closed Friday trading 1 percent higher, while the DJIA rose 0.6 percent to close at a record high for the fourth time during the week. Stock futures are dragged down by Nvidia (NVDA), whose shares are about 2% lower, continuing to slide after the chipmaker’s earnings report last week disappointed investors. This week, investors await key jobs data on Friday, which could provide clues as to how steeply the Federal Reserve might cut interest rates later this month, while today’s manufacturing data could also weigh on watchers the market.

2. Intel is reportedly preparing to unveil a plan to break up the company

Intel (INTC) Chief Executive Officer (CEO) Pat Gelsinger and other top executives at the chip maker are expected to present plans to the board in mid-September to spin off parts of the business to cut costs, according to a Reuters report. Company officials are eyeing a possible spin-off of Altera’s programmable chip unit, the report said, but the contract chip foundry operation was not scheduled to be spun off. Shares of Intel, which fell 26 percent in August after reporting disappointing quarterly results, fell 1 percent in premarket trading after rising more than 9 percent on Friday after reports the company hired Morgan Stanley and Goldman Sachs to evaluate business restructuring options. .

3. Volkswagen may close factories as part of cost-cutting plans

Volkswagen said cost-cutting efforts may force the German carmaker to close factories amid “particularly significant challenges” that may lead to extensive restructuring, including potentially cutting production of some vehicle lines. The company also said it would end its Workforce Protection Program, a job security effort that has been in place since 1994, as it prepares for plant closings. “In light of the current challenges, further steps will be necessary to secure the future of the company,” VW said in a statement to Investopedia. Last month, the company said it was considering delaying production of several electric vehicle (EV) models.

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4. Tesla is reportedly planning a 6-seat Model Y

Tesla (TSLA) plans to produce a six-seat version of its Model Y vehicle in China starting in late 2025, according to Reuters. The move is seen as an attempt to increase the appeal of its best-selling electric vehicle, and the company is preparing suppliers for a double-digit increase in production at its Shanghai plant, the report said. Tesla’s second-quarter earnings report showed profits fell amid rising AI costs and lower vehicle prices. Tesla shares are up 1% in premarket trading.

5. China announces anti-dumping probe of Canadian canola following EV tariffs

Following last week’s news that Canada would impose 100% tariffs on Chinese-made electric vehicles, China responded by opening an anti-dumping investigation into Canadian canola imports, which also imposes a 25% tariff on products from aluminum and steel from China. China is the world’s second-largest importer of canola, which is used to make cooking oil as well as for industrial purposes, with the Asian nation receiving 90 percent of its imports of the commodity from Canada. Bloomberg reported.

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