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Wall Street: U.S. stocks opened lower on Tuesday as investors returned from the Labor Day holiday to a week filled with key economic updates and political headlines.
By 9:30 a.m. Eastern time, the Dow Jones Industrial Average was down 92 points, or 0.2 percent. The S&P 500 dropped 83 points, or 1.3 percent. The Nasdaq Composite slid 399 points, or 1.9 percent, with tech names leading the decline.
Markets had ended last week on a weaker note, pressured by losses in artificial intelligence-related stocks and worries that sticky inflation could slow the Federal Reserve’s ability to cut rates. Still, the S&P 500 managed to post a 1.9 percent gain for August, extending a rebound that began after an April slump tied to tariff concerns. The index is now up about 10 percent this year and remains close to record highs.
A court ruling on tariffs added more uncertainty. The U.S. Court of Appeals decided last week that most of former President Donald Trump’s tariffs were unlawful, saying only Congress has the power to impose them. Trump vowed to appeal to the Supreme Court, which he hopes will uphold the duties. Analysts warned the decision creates more legal and policy confusion for businesses, even if it could eventually ease some tariff-related risks.
At the same time, investors are still grappling with the Fed’s interest rate path. Last week’s inflation data showed prices rose modestly in July, reinforcing the view that disinflation has slowed. While Fed Chair Jerome Powell has left the door open for a September rate cut, he also flagged lingering inflation as a risk. According to CME’s FedWatch tool, traders see a 91 percent chance of a quarter-point cut later this month. Several Fed officials are scheduled to speak this week, which could add further clarity.
Another cloud over markets is the ongoing tension between Trump and the Fed. Reports of his attempts to remove central bank officials have raised questions about the Fed’s independence. Fed Governor Lisa Cook recently said she would fight such efforts in court.
The focus now shifts to the upcoming jobs report on Friday. Economists expect U.S. payrolls to show a modest gain of 74,000 jobs in August, slightly above July’s 73,000. A weaker reading could strengthen the case for a rate cut in mid-September. Investors will also be watching Tuesday’s ISM manufacturing data, expected to show the sector still in contraction.
Earnings season continues as well, with results due this week from Zscaler, Salesforce, Broadcom, and Dollar Tree.