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U.S. equity futures slipped lower Tuesday, extending a broader market pullback tied to concern about the timing of Federal Reserve rate cuts. Investors looked to the first of a series of key labor-market reports that could clarify the case for central bank support.
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Take-Two Interactive
Updated at 7:33 AM EST
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Stock Market Today
Investor sentiment, which was rattled by Monday’s sharp move higher in Treasury bond yields, took another hit overnight. That’s when Moody’s Investors Service lowered its outlook on China’s A1 credit rating, citing risks liked to property and local government debt alongside “persistently lower medium-term economic growth.”
The decision tipped China shares sharply lower, with the benchmark CSI 300 falling 1.9% to the lowest level in nearly five years. The move underscored concern that a fading recovery in the world’s second-largest economy could increase the risk of a global slowdown in the coming year.
The MSCI World Index, the broadest measure of global stocks, fell 0.43% from a four-month high in overnight trading. But stocks in Europe found support through dovish rate comments from European Central Bank official Isabel Schnabel.
Speaking with Reuters, Schnabel said another rate hike in the region was “unlikely” given cooling inflation prospects, cementing the case for a March reduction in the bank’s main deposit rate.
Her comments also pulled benchmark German 10-year bond yields to an early June low of 2.28%, helping 10-year Treasury yields retrace some of yesterday’s rise to trade at 4.243% in the early New York session.
The regionwide Stoxx 600 index was last seen 0.1% lower on the session in early Frankfurt trading while Britain’s FTSE 100 was marked 0.66% lower in London.
In the U.S., markets are likely to key on the first of three closely watched labor-market data reports over the next four days. The October Jolts report, a measure of quit rates and unfilled positions for the month of October, is due at 10 a.m. U.S. Eastern time.
Look today for the first of this week’s three data insights on the state of the US labor market.
Bloomberg is looking for the JOLTS report to show a slight cooling of the labor market as
Job vacancies fall from 9.55 million in October to 9.34 million;
The… pic.twitter.com/fsPQ6arcX4
— Mohamed A. El-Erian (@elerianm) December 5, 2023
On Wall Street, futures contracts tied to the S&P 500 are indicating a 17 point opening-bell decline while those linked to the Dow Jones Industrial Average are suggesting a 72 point pullback.
The Nasdaq, which fell 120 points on Monday amid a broader retreat for megacap tech stocks, is called 80 points lower.
In other markets, global oil prices edged higher in the overnight session as officials from Saudi Arabia attempted to talk up their commitment to recently agreed OPEC production cuts. But gains were limited amid concern for the level of near-term demand from China.
Brent crude contracts for February delivery, the global benchmark, were marked 34 cents higher at $78.38 per barrel. WTI futures contracts for January were up 42 cents at $73.46 per barrel.
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