Futures Decline, JOLTS Report Looms, Nvidia Receives Subpoena

US futures are showing a decline after a disappointing start to September for Wall Street. Shares of technology companies, especially Nvidia—an artificial intelligence leader—have experienced significant drops. Nvidia’s stock continued to fall in premarket trading after reports emerged that U.S. regulators have issued a subpoena as part of an escalating investigation into potential antitrust issues.

1. Futures on a Downward Trend

US stock futures dipped on Wednesday, indicating a continuation of the downward momentum seen on Wall Street in the previous session. By 03:34 ET (07:34 GMT), the S&P 500 index had decreased by 80 points or 0.2%, the Dow Jones Industrial Average was down 23 points or 0.4%, and the Nasdaq was off by 127 points or 0.7%.

The major averages faced significant declines on Tuesday, marking a challenging start to September after a volatile August. Historically, September has not been kind to stocks, and traders are closely monitoring upcoming job market data that could influence the likelihood of a Federal Reserve interest rate cut.

Sentiment was further impacted by lower-than-expected figures from the Institute for Supply Management regarding US manufacturing activity, raising concerns about a potential slowdown in the economy. The benchmark indices recorded their largest daily percentage decline since August, with the tech giants—often referred to as the Magnificent Seven—experiencing substantial losses. Nvidia’s stock fell nearly 10%, leading to a remarkable $279 billion decline in market value.

2. Job Openings Data on the Horizon

Investors are looking forward to insights on the US labor market as key job openings numbers will be released on Wednesday. Economists expect the Job Openings and Labor Turnover Survey (JOLTS) to show a decrease in available positions, with July figures anticipated to drop to 8.09 million from June’s 8.18 million.

This report will precede the much-anticipated employment data set for release on Friday, which could influence how Fed Chair Jerome Powell adjusts monetary policy. Powell noted in August that it was time to shift focus from fighting inflation to addressing potential job losses.

Market analysts largely believe the Fed will implement a 25-basis point reduction in interest rates during its upcoming meeting on September 17-18, following a current rate of 5.25% to 5.5%—the highest in 23 years.

3. Nvidia Under Investigation by DOJ

According to reports, the U.S. Department of Justice has issued a subpoena to Nvidia amidst an expanding investigation into its possible antitrust practices. Following this news, Nvidia shares fell over 3% in premarket trading.

Sources suggest that the DOJ is concerned that Nvidia is complicating the process for customers looking to switch suppliers, potentially penalizing those who do not exclusively utilize its AI-optimized processors. In response, Nvidia has asserted that its clients are free to choose the best solutions for their needs and emphasized that its recent remarkable performance underscores its merit-based success.

4. Nippon Steel’s Commitment to American Management

Nippon Steel has confirmed that should its proposed $14.9 billion acquisition of U.S. Steel proceed, the core senior management and most board members would be American. Nippon Steel stated that U.S. Steel would be managed by its North American unit and emphasized its longstanding presence in the U.S. market, which has spanned over fifty years.

This announcement comes amid political concerns regarding the deal, with Democratic candidate Kamala Harris advocating for U.S. Steel to remain American-owned and operated, mirroring sentiments from President Joe Biden.

5. Crude Oil Prices Decline

Crude oil prices fell again on Wednesday, continuing the downward trend from the previous session, driven by growth concerns and the potential return of Libyan oil exports. By 03:35 ET, the Brent crude contract decreased by 1.3% to $72.81 per barrel, while West Texas Intermediate (WTI) futures also fell by the same percentage to $69.41 per barrel, following drops of more than 4% on Tuesday.

Both oil contracts hit their lowest levels since December amid signs of an impending resolution to the political conflict in Libya, which has significantly disrupted output and exports.