Markets Slide as Megacap Stocks Retreat; Eyes on Fed's Powell

U.S. stock index futures fell on Tuesday as megacap stocks took a dip. With cautious sentiment ahead of jobs opening data and Federal Reserve Chairman Jerome Powell's upcoming remarks, investors remain tense. Tesla and Nvidia experienced significant drops, while job reports and interest rate speculations continue to shape market expectations.

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Paramount Global gains on possible IAC bid *

Tesla slips ahead of deliveries data *

Fed Chair Powell to speak at ECB central banking forum *

Futures down: Dow 0.39%, S&P 500 0.47%, Nasdaq 0.58% (Updated at 7:18 a.m. ET/1118 GMT)

By Ankika Biswas and Lisa Pauline Mattackal July 2 (Reuters) -

U.S. stock index futures fell on Tuesday as megacap stocks retreated after a strong session, with additional caution creeping in ahead of jobs opening data and comments from Federal Reserve Chairman Jerome Powell later in the day. Megacap tech stocks Microsoft, Apple and Amazon.com all slipped about 0.4% in premarket trading, pulling back after jumping 2% to 3% in the previous day.

Benchmark 10-year Treasury yields slipped slightly on the day but were hovering around three-week highs, further weighing on rate-sensitive growth stocks. Meanwhile, Tesla shed 1.3% after Monday's 6% jump ahead of data on the electric maker's vehicle June-quarter deliveries, expected to fall for two straight quarters for the first time.

AI chip leader Nvidia also dropped 1.1%, with other semiconductor stocks such as Micron Technology, Marvell Technology and Arm Holdings also slipping between 0.4% and 1%. On the data front, the job openings and labor turnover survey, or JOLTS, is due after market open and is expected to show job openings fell to 7.910 million in May from 8.059 million the month prior.

The data is the first in this week's series of U.S. jobs reports, particularly Friday's non-farm payrolls, which will be crucial in assessing whether the U.S. labor market remains resilient against the backdrop of decades-high interest rates - a key determinant of economic health. Investors will parse remarks from Powell in a policy panel before a European Central Bank forum on central banking for further clues on how policymakers have assessed recent data.

As recent data signals a renewed moderation in inflation and some signs of economic weakness, market participants are holding on to their bets around two interest rate cuts by this year-end, starting from September, as per LSEG's FedWatch data. "We continue to observe that U.S. exceptionalism has somewhat softened. In particular, growing strains were seen on U.S. consumer while the tightness in the U.S. labor market has eased," said analysts at OCBC.

"Our house view continues to expect two cuts for 2024, with the first cut happening sometime in the third quarter." Other data due throughout the week include ADP National Employment and weekly jobless claims, as well as factory orders, services PMI and the minutes of the Federal Reserve's June policy meeting.

With the equity market closed on Thursday on account of U.S. Independence Day, trading volumes are expected to be light throughout the week. At 7:18 a.m. ET, Dow e-minis were down 154 points, or 0.39%, S&P 500 e-minis were down 25.75 points, or 0.47%, and Nasdaq 100 e-minis were down 116.25 points, or 0.58%.

Among other major premarket movers, Paramount Global climbed 3.2% after billionaire Barry Diller's digital-media conglomerate IAC is exploring a bid to take control of the media giant. Atlassian rose 2.0% after Piper Sandler upgraded the enterprise software maker to "overweight" from "neutral", while CrowdStrike Holdings slipped 2.3% after the same brokerage downgraded the cybersecurity firm to "neutral" from "overweight".

Polestar Automotive Holding's U.S.-listing fell 5.0% after the EV maker reported a first-quarter operating loss.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)