Private Payrolls Data Upcoming, Nvidia Achieves Record Close

Investors are looking forward to upcoming labor market data following Tuesday’s report, which revealed that job openings in the U.S. fell to the lowest level in over two years in July. In the tech sector, shares of Nvidia reached a record high following a new partnership announcement with Google, while prices in the cryptocurrency market surged after a favorable ruling regarding an exchange-traded fund tracking Bitcoin.

1. Futures Dip Ahead of Economic Data

U.S. stock futures experienced slight declines on Wednesday but remained close to unchanged levels as investors processed the weaker-than-expected job openings data while anticipating further labor market reports later this week.

At 05:14 ET, the futures contract for the Dow was down by 4 points or 0.01%, with S&P futures falling by 7 points or 0.1%, and Nasdaq futures dropping by 37 points or 0.3%.

All three major indices closed higher in the previous session after data indicated a more significant decline in job openings, a key indicator of labor demand, hitting its lowest mark in nearly two and a half years. Additionally, the number of workers voluntarily leaving their jobs also decreased sharply, suggesting that fewer employees are finding attractive offers elsewhere.

A Conference Board index also fell short of projections, hinting at a possible slowdown in the broader economy.

These statistics have fueled expectations that the Federal Reserve will opt to keep interest rates steady during their upcoming policy meeting in September, as they continue to seek ways to cool labor demand and curb inflation.

2. Private Payrolls Report Expected

The labor market’s state will receive further clarification later today with the release of private payroll data for August.

The ADP National Employment report is expected to show an increase of 195,000 jobs in the private sector for the month, a reduction from the 324,000 increase seen in July. In addition, data regarding unemployment benefit claims will be released tomorrow.

These figures will contribute to the backdrop for the highly anticipated monthly employment report. Economists predict that the U.S. economy added 170,000 jobs in August, down from the 187,000 jobs added the previous month.

When combined, this data will help gauge the Federal Reserve’s potential interest rate decisions. Current odds suggest there is an 88% chance the central bank will maintain borrowing costs between 5.25% and 5.50% next month.

On the earnings front, Brown-Forman, the owner of Jack Daniel’s whiskey, as well as tech companies Salesforce and Crowdstrike, are set to release their quarterly reports today.

3. Nvidia Achieves Record Close

Shares in Nvidia surged to a new all-time closing high on Tuesday, boosting the chipmaker’s market valuation to $1.2 trillion.

The firm has become central to the excitement surrounding generative artificial intelligence due to its specialization in providing the chips that drive this technology, positioning it advantageously in the burgeoning AI sector.

Nvidia’s stock has more than tripled in value this year, with additional momentum coming from a newly announced partnership with Google. This agreement will expand access to Nvidia’s powerful H100 graphics processing units for Google’s clients.

According to reports, Nvidia has contributed nearly one-sixth of the returns for the S&P 500 this year, marking it as a standout performer amid a broader rally in large-cap technology stocks.

4. Bitcoin Rises Following Legal Win for Grayscale

Bitcoin’s price jumped to a two-week high after an appeals court ruling in the U.S. opened the door for a spot Bitcoin exchange-traded fund.

The court determined that the Securities and Exchange Commission acted improperly by denying Grayscale’s request to convert its Bitcoin trust into an ETF that tracks Bitcoin’s price. The judges stated that Grayscale’s proposed ETF was substantially similar to an already-approved futures ETF.

Following this decision, Bitcoin’s price increased by 5.54% to $27,407.50 within 24 hours, with other major cryptocurrencies, including Ether, also seeing gains. Cryptocurrency exchange Coinbase experienced a nearly 15% jump in its stock price on Tuesday.

The push for a spot Bitcoin ETF is significant for both the cryptocurrency and asset management industries, as it would offer investors exposure to Bitcoin without direct ownership. However, the SEC has previously expressed concerns over potential market manipulation with such products.

Various companies, including major asset managers, have filed applications for spot Bitcoin ETFs this year, many of which involve collaborations aimed at regulating trading and minimizing price manipulation.

5. Oil Prices Increase Following Inventory Report

Oil prices rose on Wednesday, continuing a trend of recent gains spurred by industry data indicating a substantial decline in stockpiles and concerns surrounding a hurricane approaching the Gulf of Mexico.

As of 05:16 ET, U.S. crude futures were up 0.7% to $81.69 a barrel, while Brent crude rose by 0.5% to $85.31. Both contracts experienced an increase of over 1% on Tuesday.

Data from the American Petroleum Institute, released late Tuesday, showed that crude oil inventories dropped by over 11 million barrels last week, signaling healthy demand ahead of the Labor Day holiday, which marks the traditional peak of summer demand.

Additionally, Hurricane Idalia is threatening production in the Gulf of Mexico, a region responsible for approximately 15% of U.S. oil output. Chevron announced it had evacuated staff from several platforms while maintaining production levels. In contrast, Kinder Morgan stated it planned to shut down a petroleum pipeline as a precaution.