Dow futures retreated Tuesday as market participants braced for November’s employment report.
The employment data, which is delayed due to the government shutdown, is a key economic indicator that could influence Federal Reserve policy decisions.
The Dow Jones Industrial Average futures fell 72 points, or 0.2%, while S&P 500 futures declined 0.3% and Nasdaq 100 futures dropped 0.4%.
The cautious positioning came after a weak Monday session, during which all three major indexes finished in negative territory, dragged down by significant selling pressure in artificial intelligence stocks.
5 things to know before Wall Street opens
1. The November employment report represented a critical juncture for equity markets as investors awaited fresh labor market signals.
The consensus expectations among economists pointed to a significant slowdown in hiring, with nonfarm payrolls projected at just 50,000, a dramatic deceleration from September’s 119,000 job additions.
Simultaneously, forecasters anticipated the unemployment rate ticking up to 4.5% from September’s 4.4%.
2. Wall Street’s three major indexes ended Monday in the red, weighed down by a brutal reckoning in the artificial intelligence trade.
Broadcom slumped 5.6%, ServiceNow tanked 11.5%, and Oracle fell 2.7%, continuing a selloff that has already made huge dents for these high-growth stocks.
The root cause is straightforward: margin concerns and ROI anxiety.
Broadcom’s guidance projected gross margins will compress by 100 basis points for some AI chip systems, even as the company forecasts AI revenue to hit $8.2 billion this quarter.
Oracle, meanwhile, raised capex guidance to $50 billion from $35 billion but revealed debt-fueled funding constraints that left investors spooked.
3. Ford announced a $19.5 billion charge as it restructures its electric vehicle strategy, signaling a fundamental shift in Detroit’s approach to the EV transition.
The company is discontinuing the next-generation F-150 Lightning and ending a $6 billion battery joint venture with SK On.
Ford wants to redirect the focus toward hybrid vehicles and extended-range electric options instead.
CEO Jim Farley acknowledged that premium EVs priced between $50,000 and $80,000 have failed to gain sufficient market traction.
4. Washington has suspended the United Kingdom’s technology prosperity deal, citing frustration with slow progress in broader trade negotiations.
The move signals that the £31 billion partnership, which encompassed artificial intelligence, quantum computing, and nuclear fusion collaboration, is now being leveraged in wider trade disputes.
The core tension centers on digital services taxation and agricultural standards.
Britain maintains a 2% digital services tax that generates approximately £800 million annually from US technology companies, which Washington has demanded be eliminated.
5. Global equities tumbled on Tuesday as investors grew cautious ahead of critical US economic data releases.
Europe’s Stoxx 600 fell 0.2%, with most sectors underwater, while Asia suffered sharper losses driven by technology sell-offs.
Japan’s Nikkei 225 dropped 1.6%, with tech heavyweights Yaskawa Electric and Fujikura each plunging more than 6%.
Hong Kong’s Hang Seng Index declined 1.5% despite stable unemployment at 3.8%, as tech names bore the brunt of profit-taking. Shanghai, Seoul, Taipei, Singapore, and Sydney all posted losses ranging from 0.2% to 2.2%.
The post Dow futures plunge sharply on Tuesday: 5 things to know before Wall Street opens appeared first on Invezz