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Market Snapshot: U.S. stocks set to start September strong as manufacturing data comes on the radar

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U.S. stocks are heading for a positive start to September after eking out the seventh straight months of gains in August, as investor attention remains focused on Friday’s jobs report while manufacturing data is set to roll in in the interim.

What are major indexes doing?
  • Dow industrials futures
    YM00,
    +0.30%

    rose more than 100 points, or 0.3%, to 35,453
  • S&P 500 futures
    ES00,
    +0.30%

    gained 0.3% to 4,534
  • Nasdaq 100 futures
    NQ00,
    +0.17%

    rose 0.2% to 15,614

On Tuesday, the Dow Jones Industrial Average
DJIA,
-0.11%

fell 39 points, or 0.1%, to 35,360, in line with the S&P 500
SPX,
-0.13%
,
which fell 0.1% to 4,522.68 and the Nasdaq
COMP,
-0.04%
,
which closed just below flat at 15,259.24.

What’s driving the market?

“It might be the start of September today, but investors will be grappling with a number of familiar themes this morning,” said Jim Reid, a strategist at Deutsche Bank, pointing to the debate over inflation and when central banks will end pandemic-era monetary policy.

The main event for this week remains Friday’s U.S. jobs report. Federal Reserve chair Jerome Powell has indicated that the central bank would be keeping an eye on employment data as it decides when to begin slowing pandemic-era monthly asset purchases, which add liquidity to markets.

The trading session in Asia was met with weak data, as China’s Caixin Manufacturing purchasing managers index (PMI) for August confirmed Tuesday’s official figures to show that Chinese factory activity contracted last month. Data from seven Southeast Asian countries in the ASEAN bloc also showed that manufacturing activity contracted for the first time since May 2020.

“That rounds out a grim week for China’s PMIs as Covid-19 lockdowns and the same supply chain challenges the rest of the world is experiencing erode economic performance,” said Jeffrey Halley, an analyst at broker OANDA.

Early trading in Europe was met with data in the form of the IHS Markit manufacturing PMI for last month, showing that industrial growth remained strong but felt a pinch from pandemic-linked supply chain issues and the availability of parts. The August PMI came in at 61.4, down from 62.8 in July.

On the U.S. economic front, the ADP employment report for August represents the opening act before Friday’s headliner jobs report. That will be released alongside the ISM manufacturing index and motor vehicle sales figures for last month, as well as construction spending for July.

The OPEC+ group of oil producing countries, including Russia and Saudi Arabia, are will meet on Wednesday to discuss output.

“The scheduled 400,000 barrel per day increase is well priced into markets,” said Halley. “Only a significant deviation from that would spark volatility.”

In terms of corporate earnings, Campbell Soup
CPB,
+1.88%

will share the spotlight with ChargePoint
CHPT,
+1.24%
,
Okta
OKTA,
-0.52%
,
and Asana
ASAN,
-2.98%
,
among other companies.

How are other markets faring?
  • In Asia, Tokyo’s Nikkei 225
    NIK,
    +1.29%

    surged 1.3%, while the Hong Kong Hang Seng Index
    HSI,
    +0.58%

    lifted 0.6% and the Shanghai Composite
    SHCOMP,
    +0.65%

    rose 0.7%.
  • Chinese technology stocks JD.com
    9618,
    +1.63%

    and Tencent
    700,
    +1.50%

    were standouts in Asian trading, helping the Hang Seng Tech Index
    HSXTCHINDXXX,
    +1.30%

    outperform and rise 1.3%.
  • London’s FTSE 100
    UKX,
    +0.67%

    was 0.9% higher, while the pan-European Stoxx 600
    SXXP,
    +0.61%

    increased 0.7%; in Paris, the CAC 40
    PX1,
    +0.92%

    ticked up 1% and Frankfurt’s DAX
    DAX,
    +0.28%

    moved 0.5% into the green.
  • Oil prices were marginally higher, with international benchmark Brent
    BRN00,
    +0.35%

    crude ticking up near 0.5%, approaching $72 a barrel.

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