Nasdaq, S&P, Dow futures extend decline as worries of economic slowdown resurface

Equity index futures traded lower on Wednesday, a day after Wall Street’s main stock indexes posted their biggest drop since the Aug. 5 crash.

S&P 500 Futures (Spocks) -0.3%Nasdaq 100 futures (US100:IND) -0.4% and Dow futures (Indu) -0.3%.

10-year government bond yield (US10Y) fell 1 basis point to 3.82%. The 2-year Treasury yield (US2Y) fell 2 basis points to 3.85%.

September is typically a weak month for stocks, but U.S. stocks sold off on Tuesday as a weak manufacturing recession rekindled concerns that the economy could be slowing sharply.

“September started after the Labor Day holiday on Monday but with a notable sell-off yesterday it’s starting to live up to its reputation as the riskiest month of the year,” said Jim Reed at Deutsche Bank.

Reid added that the main catalyst for the selling pressure was the latest ISM manufacturing data, which rekindled investor concerns that the U.S. economy was losing some momentum.

Nvidia (NVDA) 9.5% Slumping stock prices on Tuesday also weighed on the market, with shares of semiconductor giants dropping by nearly $280 billion.

On the economic calendar, investors will be focused on the July JOLTS report, which is due to be released during market hours, with economists expecting job openings to fall to 8.09 million.

The labor report comes days before the release of the key August nonfarm payrolls report, which is expected to be released on Friday.

“US data dominates the calendar. JOLT jobs data is expected to decline, reflecting reduced labour market fluidity. It will still remain above pre-pandemic levels, reflecting structural changes in hiring,” said Paul Donovan at UBS.

Pantheon Macroeconomics said the July JOLTS report will reinforce the message that the labor market is cooling.

The Federal Reserve’s Beige Book is also scheduled to be released on the same day.