Last Updated: 4:00 PM EST
Stock indices finished today’s trading session in the red amid a slew of new economic data. The Nasdaq 100 (NDX), the S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) fell 1.92%, 1.57%, and 1.49%, respectively.
Inflation continues to remain stubbornly sticky as the Employment Cost Index, which measures the change in labor costs through wages and benefits, increased 1.2% quarter-over-quarter. For reference, analysts were expecting a 1% increase.
As a result, the market-implied probability of just one 25-basis point rate cut increased to 41% compared to last week’s 31%. The probability of no rate cuts also increased to 23% from just 10% a week ago. This is a dramatic change from the optimism seen at the beginning of the year when investors were pricing in at least three cuts.
Furthermore, the United States Chicago Purchasing Managers Index was released by ISM-Chicago, which measures the economic health of the manufacturing sector in Chicago. An expansion is defined by a number that is greater than 50, whereas a reading that is lower is considered a contraction.
In April, the number came in at 37.9, which was much lower than the expected 44.9 from forecasters and a decrease from last month’s report of 41.4. It’s worth noting that the Chicago PMI has been trending lower since its peak of 75.2 back in May 2021. In addition, it has only expanded once since September 2022.
In addition, the Conference Board released its Consumer Confidence report, which, as the name suggests, measures consumers’ confidence in the economy. This report is believed to be a leading indicator of spending patterns, as optimistic consumers are more likely to spend than pessimistic ones.
Consumer confidence came in at 97, which was lower than expectations of 104 and below last month’s reading of 103.1.
First Published: 4:26 AM EST
U.S. futures edged lower on Tuesday morning after a positive start to the week, with investors awaiting the release of earnings from mega-cap companies, including Amazon (AMZN), the Federal Reserve’s interest rate decision, and April’s jobs report. The futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) were down by about 0.08%, 0.12%, and 0.05%, respectively, at 3.20 a.m. EST, April 30.
In after-hours action, shares of Microstrategy (NASDAQ:MSTR) dropped after the analytics software company reported a wider-than-expected loss. Meanwhile, Tesla (NASDAQ:TSLA) stock, which jumped yesterday, had cooled a bit.
On the earnings front, tech giant Amazon will release its Q1 2024 financial results. Momentum in its cloud business and cost reduction initiatives keeps Wall Street upbeat about AMZN stock. Along with AMZN, Super Micro Computer (SMCI) will also announce its Q3 Fiscal 2024 financial results.
Turning to this week’s economic reports, the U.S. Federal Reserve will release its latest interest rate decision on Wednesday. Moreover, April’s jobs report is due on Friday.
In the meantime, the U.S. 10-year treasury yield was up at the time of writing, floating near 4.6%. At the same time, WTI crude oil futures trended higher, hovering near $82.35 per barrel as of the last check.
Elsewhere, European markets opened higher as investors await the release of corporate earnings and economic data, including euro zone inflation and GDP numbers.
Asia-Pacific Markets Remained Mixed Today
Asia-Pacific indices remained mixed on Tuesday as investors await the release of China’s official purchasing managers index for April.
Japan’s Nikkei and Topix indices were up 1.24% and 2.11%, respectively. On the other hand, China’s Shanghai Composite and Shenzhen Component indices fell by 0.26% and 0.9%, respectively. At the same time, Hong Kong’s Hang Seng index was up 0.18%.
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