4:05pm: US equities lose steam to end down on the day
US stocks couldn’t hold some early-day advances, finishing the day lower despite posting another monthly gain in August.
Weighing on stocks was the Conference Board's monthly report on consumer confidence, which fell more than expected in August.
On the day, the Dow fell 39 points to 35,360, while the S&P 500 eased 6 points to 4,523 and the tech-heavy Nasdaq shed 7 points to 15,259.
Notable movers included shares of Zoom Video Communications, Inc (NASDAQ:ZM), which sank more than 16% after the video-conferencing software company experienced slowing revenue growth in its second quarter.
12:05pm: Weakened consumer sentiment weighs on end of month rally
Two of the major US benchmarks held in the green at midday despite data confirming consumer confidence is waning with surging coronavirus (COVID-19) cases and concern over inflation mounting.
After marking a new high a day prior, the S&P 500 was up 0.334 points to 4,529 at lunch time. The Dow Jones Industrial Average added 43 points holding in the 35,442 range, while the NASDAQ slipped into the red shedding 14 points to sit at 15,251.
Despite the muted early day performance for the last trading day of the month, the S&P 500 remains on track to post a seventh consecutive monthly gain.
Headwinds could be ahead for the markets as today’s report from the Conference Board anticipates spending to slow in the coming months.
“The Conference Board measure of confidence has fallen to a six-month low as worries about Covid's resurgence and the impact of inflation on spending power make households more nervous. It looks increasingly likely that consumer spending has stalled in 3Q, but a strong labour market and decent household finances offer hope that this will be temporary,” James Knightley, Chief International Economist at ING wrote in a market report.
However, the analyst did point out there are reasons to be optimistic heading into the final fiscal quarter of the year.
“Looking further ahead, Covid case numbers are showing signs of topping out so we think that confidence will gradually recover, especially given jobs continue to be created in significant numbers and wage rates are rising given the competition for workers,” Knightley added.
“We also have to remember credit card balances have been shrinking and cash and savings deposits have risen substantially through the pandemic. This should provide a decent platform for activity in 4Q and into 2022.”
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9.42am: Wall Street shares start lower
Wall Street shares started in the red on the last trading day of August, pulling back from recent highs.
The Dow Jones Industrial Average lost around 46 points at 35,352 shortly after the New York bell.
The broader based S&P 500 shed around six points at 4, 522, while the tech laden Nasdaq slipped over 47 points to stand at 15,218.
"Equities earlier appeared to still be riding the Powell wave in the absence of much else so late in the summer," said senior market analyst Craig Erlam, at trading group Oanda in a note.
"But that appears to have faded throughout the morning in Europe. Things should pick up again going into the Fed meeting in a few weeks and the coming days does have a lot of data on offer.
"But the start of this week is lacking a little, especially when combined with the UK bank holiday on Monday."
Yesterday, FTSE 100 was closed for a bank holiday. On Tuesday, the UK blue-chip index is down around 38 points at 7,109.
Attention turns now to the latest US consumer confidence numbers, which may offer insights into whether the spread of the coronavirus (COVID-19) Delta variant is weighing on the willingness to spend.
6.45am: US stocks seen higher
US stocks look set to edge higher on Tuesday ahead of data on US consumer confidence.
Futures for the Dow Jones Industrial Average were ahead 0.2%, while S&P 500 futures added 0.3% a day after closing at another all-time high, and those for the tech-laden Nasdaq-100 rose 0.4%.
Investors remain upbeat after Federal Reserve chairman Jerome Powell reiterated in a speech on Friday that the timing of the tapering of bond purchases—which is likely to begin later this year—will not have any bearing on subsequent decisions to raise interest rates.
The latest US consumer confidence numbers, due at 10.00am ET, may offer insights into whether the spread of the coronavirus (COVID-19) Delta variant is weighing on the willingness to spend.
Data released earlier Tuesday showed China’s services sector suffered an unexpectedly severe blow in August as a wave of coronavirus infections sparked new lockdowns across the country.
China’s official non-manufacturing purchasing managers index, which tracks activity in the construction and services sectors, plummeted to 47.5 in August, from 53.3 the prior month, breaking through the 50 mark that separates expansion from contraction.
Five things to watch on Tuesday:
Zoom Video Communications Inc (NASDAQ:ZM) posted its first billion-dollar revenue quarter but signaled a faster-than-expected easing in demand for its video-conferencing service after a pandemic-driven boom, sending its shares tumbling after-hours on Monday.
Shares of Robinhood Markets Inc (NASDAQ:HOOD) tumbled on Monday after news that PayPal (NASDAQ:PYPL) Holdings Inc may start an online brokerage and a report saying US regulators were looking at a possible ban on a practice that accounts for the bulk of the company's revenue.
American hedge fund manager Bill Ackman's Pershing Square is buying an additional 2.9% of Universal Music Group from Vivendi for $1.149 billion, the French conglomerate said on Tuesday.
Russian internet giant Yandex said it would buy Uber's stakes in their joint food tech, delivery and self-driving businesses, and increase its stake in a mobility-focused joint venture as part of a $1 billion deal.
The European Union has recommended halting nonessential travel from the US because of the rise of COVID-19 cases, EU diplomats said Monday, ending a summer-vacation reprieve for American tourists.