Investing.com –Wall Street futures pointed to a flat to slightly higher open on Tuesday on the first trading session of the week after the Labor Day holiday with investors looking ahead to data on the U.S. services sector.
The blue-chip Dow futures inched up 15 points, or 0.08%, by 7:02AM ET (11:02AM GMT), the S&P 500 futures edged forward 2 points, or 0.07%, while the tech-heavy Nasdaq 100 futures advanced 4 points, or 0.08%.
U.S. traders were not only returning from a long weekend, but many would also be seeing their first day back after summer vacation. U.S. equities have been characterized by the low volume and low volatility over the summer months.
The S&P 500 hasn’t registered a 1% move in either direction in closing prices since July 8. That was despite the fact that markets had to face a Fed policy decision on July 27 or what were widely anticipated to be “market moving” events recently such as Federal Reserve (Fed) chair Janet Yellen’s speech at Jackson Hole or last Friday’s jobs report.
In this context, market participants will “get back to work” on Tuesday as they look for more clues on when the Fed could resume policy normalization.
The U.S. Institute of Supply Management (ISM) is to release data on August service sector activity at 10:00AM ET (14:00GMT) on Tuesday. The gauge is expected to inch down 0.5 points to 55.0. Anything above 50.0 signals expansion.
The data takes on extra importance after the ISM manufacturing survey published last week showed a shocking contraction in activity and will most likely be one of the factors that could have an effect on Fed rate hike timing in the run-up to the September 20-21 meeting.
Despite the initial reaction last Friday to nonfarm payrolls coming in under consensus, markets have once again been ticking up odds on monetary policy tightening.
Fed fund futures are currently pricing in a 27% chance of a rate hike at the Fed's September 20-21 meeting, according to Investing.com's Fed Rate Monitor Tool.
Odds are still for a move in December with the chance having inched up to 58.6% on Monday.
Meanwhile, Brent crude prices edged lower on Tuesday, as optimism surrounding an agreement between Saudi Arabia and Russia to stabilize the oil market began to fade.
Brent oil for November delivery declined 25 cents, or 0.52%, to trade at $47.38 a barrel by 7:02AM ET (11:02AM GMT).
Brent spiked by more than 5% on Monday to touch an intraday peak of $49.40 after Saudi Arabia and Russia pledged to work together to support the market. But prices pared gains later in the session to end well off the highs as the news underwhelmed traders who had been hoping for a production freeze.
Elsewhere, U.S. crude was at $44.93 a barrel, 49 cents, or 1.10%, higher than its last settlement on Friday. Nymex prices surged more than $2.00 on Monday to hit a daily peak of $46.53. Futures did not settle on Monday due to the Labor Day holiday.
In company news, Monsanto (NYSE:MON) shares were around 2% higher in pre-market trade on Wall Street after news that German pharmaceutical and crops manufacturer Bayer AG (DE:BAYGN) was now willing to offer more than $65 billion to acquire the world's largest seeds company.