US open: Markets slip as investors digest poor data
US stocks retreated on Tuesday, with the S&P 500 pulling back from a one-month high, as poor economic data dampened market sentiment after the long weekend.
By 1033 ET, the Dow Jones Industrial Average and Nasdaq were 0.3% lower, while the S&P 500 was down 0.4%.
The S&P 500 closed Friday's session at 4,515.77, its highest finish since 7 August, after the all-important non-farm payrolls report raised hopes that the Federal Reserve will hold off from tightening monetary policy any further at its next meeting.
Cementing hopes further on Tuesday were comments from Fed governor Christopher Waller, a well-known hawk, who said the central bank "can proceed carefully" after recent improvements in data. “There is nothing that is saying we need to do anything imminent, anytime soon, so we can just sit there [and] wait for the data,” Waller said.
In other news, oil prices rallied after Saudi Arabia and Russia extended voluntary production cuts until the end of the year. Brent crude was up 1.4% at a fresh 2023 high of $90.21 a barrel in afternoon trade.
Economic pictures remains mixed
In China, the Caixin/S&P services purchasing managers' index (PMI) fell to an eight-month low of 51.8 in August from 54.1 in July, below consensus expectations of 53.0.
Meanwhile, S&P's Eurozone composite PMI slipped for the fourth straight month to a 33-month low of 46.7 in August, from 48.6 in July, below consensus estimates and the flash reading of 47.0.
Meanwhile, US factory orders fell 2.1% in July, according to the Commerce Department, after four straight months of gains. However, analysts were forecasting a bigger fall of 2.3%.
In more positive news, Goldman Sachs said that the likelihood of the US economy falling into recession over the next year has dropped to just 15%, down from a prediction of 20% in July and 35% in March.
Stock movers
In corporate news, Disney shares were rising after the entertainment giant pressed customers of Spectrum cable to consider switching to its Hulu live TV channel, as its disagreement over distribution with parent company Charter Communications continues. Disney removed EPSN and ABC from Spectrum's cable service last Thursday.
Airbnb and Blackstone were on the rise after it was announced that both stocks will be included in the S&P 500 when the quarterly rebalancing of the index happens on 18 September. Other changes include Deere replacing Walgreens Boots Alliance on the S&P 100.