Wall Street Braces for Flat to Lower Open Amid Key Job Reports and Fed Signals

Wall Street's major indexes are expected to open flat or lower as investors prepare for job reports and digest Federal Reserve Chair Jerome Powell's comments on rate cuts. Powell indicated a possible 50 basis point rate reduction by year-end, affecting market expectations and investor strategies.

Wall Street's major indexes are set for a flat to lower open on Tuesday, ahead of a critical series of job reports this week. The developments follow Federal Reserve Chair Jerome Powell's assertion on Monday that the central bank intends to reduce borrowing costs by 50 basis points by year-end, if consumer spending and gross domestic income data remain robust.

Traders are now pricing in a 60.3% chance of a 25 basis point cut at the November meeting, a notable increase from last week's 41.8% probability, according to the CME Group's FedWatch Tool. With inflation nearing the Fed's 2% target, the focus has shifted to the labor market as the central bank continues its monetary policy easing cycle initiated in September.

Economic data scheduled for release include August's job openings and labor turnover survey (JOLTS) and the Institute for Supply Management's estimate for September's manufacturing activity, both due at 10 a.m. ET. Comments are also expected from several Fed presidents and Governor Lisa Cook on the economic and monetary policy outlook during the day.

(With inputs from agencies.)