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Futures lower, JOLTS ahead, GameStop surges - what's moving markets

Published 06/04/2024, 03:45 AM
© Reuters

Investing.com -- U.S. stock futures slip following a volatile session on Monday. Traders are looking ahead to the release of key job openings data, which could provide a fresh glimpse into the state of the U.S. labor market. GameStop (NYSE:GME) shares move higher in after-hours trading, suggesting an extension in a Monday rally in the videogame retailer that was fueled by the return of stock influencer Keith Gill to social media website Reddit.

1. U.S. futures dip

U.S. stock futures hovered below the flatline on Tuesday following choppy trading in the previous session.

By 03:30 ET (07:30 GMT), the Dow futures contract had shed 76 points or 0.2%, S&P 500 futures had fallen by 14 points or 0.3%, and Nasdaq 100 futures had dipped by 69 points or 0.4%.

The main averages on Wall Street posted a mixed close on Monday, in a session marked by a glitch in the New York Stock Exchange that led to heavy volatility in the shares of Warren Buffett's Berkshire Hathaway (NYSE:BRKa), miner Barrick Gold (NYSE:GOLD), and the halting of trading in at least 60 stocks. The 30-stock Dow Jones Industrial Average dropped by 0.3%, while the benchmark S&P 500 gained 0.1% and the tech-heavy Nasdaq Composite added 0.6%.

Tech stocks delivered a late rally, while shares in energy firms faltered. U.S. Treasury yields touched two-week lows after manufacturing data showed activity in the sector had slowed for the second consecutive month, pointing to possible weakening in wider economic growth.

Traders also increased their bets that the Federal Reserve will choose to begin ratcheting down interest rates from more than two-decade highs in September, according to CME Group's (NASDAQ:CME) closely-monitored FedWatch Tool. In a note, analysts at ING said the manufacturing figures, along with separate numbers suggesting a decline in construction industry spending, "[indicate] that monetary policy is restrictive and is acting as a brake on economic activity."

2. U.S. job openings data ahead

Investors will have the chance to parse through new U.S. job openings data on Tuesday, as they attempt to piece together the picture of labor demand in the world's largest economy.

Economists expect the Labor Department's Job Openings and Labor Turnover Survey -- also known as the JOLTS report -- to have slipped to 8.37 million in April, down from a three-year low of 8.488 million in the preceding month.

A decline could be a sign of easing labor market conditions in the U.S. -- a trend that may boost hopes for Fed rate reductions later this year. In theory, a cooldown in demand for workers could defuse some upward pressure on wages and, by extension, inflation.

Fed policymakers are tipped to keep borrowing costs on hold at a range of 5.25% to 5.50% at a meeting next week. Several officials have said in a recent days they would like to see more evidence price gains are reliably decelerating to their target level before rolling out potential rate cuts.

3. GameStop shares surge

Shares in GameStop rose by more than 8% in extended hours trading, as stock influencer Keith Gill appeared to hold on to gains in his holdings of the videogame retailer following a sharp rally on Monday.

GameStop, which was the focal point of a rally in so-called "meme stocks" in 2021, advanced by 21% on Monday. The jump came after Gill, who is known online as "DeepF-------Value" and "Roaring Kitty", posted a screenshot on social media site Reddit which showed he had made a $116 million bet on the company.

After the closing bell on Monday, Gill posted another screenshot indicating that he held on to his stake of 5 million GameStop shares, or roughly 1.8% of its publicly available stock, and 120,000 call options.

Several media sources have said they have been unable to independently verify the validity of the screenshots. Meanwhile, E-Trade, the investment platform Gill uses, is holding internal talks over whether to ban him from the service due to concerns over market manipulation, the Wall Street Journal reported.

4. Illumina to spin off Grail cancer testing unit

Shares in Illumina (NASDAQ:ILMN) edged slightly higher in after-hours trading following a decision by the gene sequencing firm to spin off its Grail cancer testing division.

California-based Illumina said its board had approved a spin out of Grail. The move is expected to take place on June 24, with the unit being listed on the Nasdaq as "GRAL."

"Today's announcement marks a milestone for Illumina and signals an important step forward for the company, since the divestiture of Grail is one of our 2024 priorities," Illumina Chief Executive Jacob Thaysen said in a statement.

Last year, U.S. trade regulators ordered Illumina to divest Grail, arguing its $8 billion purchase of the business would dent competition in the market for possibly life-saving cancer testing.

European Commission antitrust authorities had also previously slapped a 432 million euro fine on Illumina for implementing the Grail merger without the bloc's permission.

5. Oil extends declines

Crude prices fell Tuesday, extending losses from the previous session, after a group of major producers signaled an increase in supply later this year.

By 03:29 ET, the U.S. crude futures (WTI) traded 1.6% lower at $73.03 per barrel, while the Brent contract dropped 1.4% to $77.27 per barrel. Both contracts slid over 3% on Monday, and were at their lowest level since early-February.

The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, on Sunday agreed to extend most of their oil output cuts into 2025 but left room for voluntary cuts from eight members to be gradually unwound.

Sentiment was also hit by weak purchasing managers' index data from both the U.S. and China, the two biggest economies in the world.

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