Markets down ahead of key US jobs report

Financial markets were down on Tuesday ahead of a key U.S. jobs report that is expected to influence the Federal Reserve’s decision to start lowering interest rates.

Futures for the S&P 500 and the Dow Jones Industrial Average were each down 0.5% before the bell.

Analysts suggest that if the report shows rising unemployment, there could be concerns about the growth of the economy.

“It is shaping up to be a significant litmus test. A stronger-than-expected payroll number, paired with a lower unemployment rate, could inject some much-needed confidence into the market, signaling that growth risks might be easing, at least for now,” said Stephen Innes, analyst at SPI Asset Management.

“If the report disappoints, especially if it pushes the unemployment rate higher, we could quickly see growth concerns flare up again.”

Also due are the earning results for several key companies, with Dollar Tree, Dick’s Sporting Goods, Broadcom and Costco all reporting this week.

On Monday, shares of U.S. Steel dropped 4.4% after Vice President Kamala Harris told a crowd in Pennsylvania on Monday that she opposed the company’s planned sale to Japan’s Nippon Steel.

Biden has previously said he opposes U.S. Steel’s would-be sale to Nippon in order to better “maintain strong American steel companies powered by American steel workers.”

Nippon Steel Corp. said last week it would spend an additional $1.3 billion to upgrade facilities in Pennsylvania and Indiana, on top of a previous $1.4 billion commitment.

Nippon also reiterated that it expects the transaction to close in the second half of 2024, despite ongoing political and labor opposition.

A potential machinists strike led to Boeing shares falling 3.5% after its stock was downgraded by Wells Fargo.

Boeing’s contract with the International Association of Machinists is set to expire just before midnight on Sept. 12.

The U.S. jobs data expected on Friday will have repercussions through global markets, including Asia.

Last Friday, stocks rose in the U.S. as a report showed that inflation has continued to cool, leading Wall Street to believe that the Federal Reserve will soon cut rates.

Elsewhere, South Korea’s Kospi initially rose after a report showed consumer inflation slowed in August to the weakest in more than three years, supporting expectations of an easing of monetary policy. The Kospi later declined 0.6% to 2,664.63.

South Korea’s consumer price index, or CPI, rose 0.4% from the previous month and 2.0% from a year earlier, after gaining 0.3 from a month earlier and 2.6% on-year in July.

Hong Kong’s Hang Seng dipped 0.2% to 17,651.49, while the Shanghai Composite edged down 0.3% to 2,802.98.

Worries were growing about the resilience of China’s economy, as recent data showed a mixed picture.

Weak earnings reports from Chinese companies added to the pessimism.

This article includes reporting from The Associated Press