Futures fall as markets prepare for a heavy data week

(Reuters) – U.S. stock index futures traded lower on Tuesday as caution prevailed ahead of a series of economic data reports that could influence how much the Federal Reserve eases monetary policy in this year.

The blue-chip Dow and the benchmark S&P 500 rallied from early August losses and ended Friday with gains for a fourth straight month after data pointed to a robust economy and a tempering of price pressures.

The Dow is at a record high and the S&P 500 is within 1% of its own stage as markets enter what has been a historically weak month for the major indexes, on average.

Traders continue to look for reassuring signs about the economy, with the release of the monthly ISM manufacturing survey due at 10 a.m. ET. Economists expect the manufacturing index to rise to 47.5, but remain in contraction territory.

A number of labor market figures will also be reviewed during the week ahead of Friday’s non-farm payrolls figure for the previous month. The jobs market came under increased scrutiny after July’s report suggested a bigger-than-expected slowdown, which consequently triggered a global sell-off in riskier assets.

The central bank’s meeting at the end of the month will be closely watched following Chairman Jerome Powell’s recent support for future policy adjustment. According to CME Group’s FedWatch tool, the odds of a 25 basis point rate cut are 69%, while those for a cut of more than 50 bps are 31%.

At 5:30 a.m. ET, the Dow E-mini was down 178 points or 0.43%, the S&P 500 E-mini was down 30 points or 0.53%, the Nasdaq 100 E-mini was down 161 points or 0.83%.

Rate-sensitive chip stocks led premarket declines, with Nvidia down 2.3%, Broadcom down 1.8%, Advanced Micro Devices losing 1.3%, after the Philadelphia index rose 2.6% SE Semiconductor from Friday.

Among others, Tesla added nearly 1 percent after a report said it plans to produce a six-seater variant of its Model Y car in China from late 2025. Separately, the automaker’s sales in China posted its best ever month for the year so far in August.

Boeing lost 2.6 percent after brokerage Wells Fargo downgraded the planemaker to “underweight” from “equal weight.”

US Steel fell 5 percent after Democratic presidential candidate Kamala Harris expressed concern about the steel company’s purchase by Japan’s Nippon Steel.

(Reporting by Johann M Cherian in Bengaluru; Editing by Shounak Dasgupta)