Gold prices add to record high amid fiscal, tariff concerns
Investing.com - U.S. stock futures point to a mixed opening on Wall Street, following a decline in equities in the previous session. Alphabet avoids deep penalties in a closely-monitored antitrust case, as a judge rules that the Google parent does not have to spin off its popular Chrome browser. The Federal Reserve is scheduled to release a key snapshot of the U.S. economy, while cloud-based software group Salesforce is set to report its latest results after the bell and gold briefly notches a fresh record high.
1. Futures mixed
U.S. stock futures were hovering around both sides of the flatline on Wednesday after equities on Wall Street sank in the prior session to begin a holiday-shortened trading week.
By 02:58 ET (06:58 GMT), the Dow futures contract had slipped by 122 points, or 0.3%, S&P 500 futures had edged up by 10 points, or 0.2%, and Nasdaq 100 futures had climbed by 78 points, or 0.3%.
The main averages fell on Tuesday, as investors returned following the Labor Day holiday to a sell-off in longer-dated government debt and fresh uncertainty lingering over the trajectory of sweeping U.S. tariffs.
Partially denting sentiment was a ruling late last week from a U.S. appeals court that most of President Donald Trump’s import levies were illegal. The decision, which the Trump administration has vowed to appeal to the Supreme Court, cast doubt over the White House’s ability to use the duties as a tool in international economic policy -- and comes as a court is likely to weigh in on a separate effort by Trump to dismiss Federal Reserve Governor Lisa Cook.
While the indices finished off their lowest levels of the day, the Cboe Volatility Index -- a crucial fear measure -- ticked higher.
In individual stocks, Kraft Heinz (NASDAQ:KHC) declined by 7% after the food packaging group said it would split into two separate entities. PepsiCo (NASDAQ:PEP), on the other hand, rose 1.1% following the disclosure of a $4 billion stake in the beverage firm by activist investor Elliott Management.
The blue-chip Dow Jones Industrial Average shed 0.6%, the benchmark S&P 500 dipped by 0.7%, and the tech-heavy Nasdaq Composite fell by 0.8%. It was a relatively downbeat opening to September, a month traditionally viewed as one of the worst for U.S. stocks.
2. Alphabet shares climb after antitrust case ruling
Alphabet (NASDAQ:GOOGL) shares rose over 5% in extended hours trading after a federal judge ruled that Google will not be required to sell its popular Chrome web browser as part of remedies in the Justice Department’s landmark antitrust case.
Judge Amit Mehta’s decision allows Google to avoid one of the most severe potential penalties following the court’s earlier finding that the company maintained an illegal monopoly in the search market. While Google will be barred from entering into exclusive contracts for internet search, the ruling spares the tech giant from divesting key assets.
The decision also determined that Google will not have to sell off its Android operating system, representing another significant victory for the company.
Additionally, the judge ruled that Google will not be required to cease payments to Apple (NASDAQ:AAPL) and other companies for preloading Google products. Shares in the iPhone maker also advanced in after-hours dealmaking.
The judgment, which will last for six years, does require Google to share certain information with competitors as a remedy for its online search monopoly. This less severe outcome than what government prosecutors had sought appears to have relieved investors.
3. Beige Book ahead
The Federal Reserve is due to publish its latest "Beige Book" on Wednesday, offering one of the last snapshots of the economy before the central bank’s September policy meeting.
It will be the first such report since July, when contacts across several industries warned that they anticipate cost pressures will "remain elevated in the coming months."
This would increase the "likelihood that consumer prices will start to rise more rapidly by late summer," the report noted, adding that all of the Fed’s 12 districts have flagged the impact of Trump’s trade policy.
The Beige Book, which aims to bring together surveys and observations from commercial and community contacts at each of the Fed’s regional banks, also showed that many were worried about a possible slowdown in business. At the same time, uncertainty around the trajectory of the tariffs has led some companies to postpone major hiring and layoff decisions, the report said.
More clarity on the state of the American labor market is due out this week, including a survey of job openings later on Wednesday. This, along with private payrolls and weekly jobless claims, will serve as precursors to the all-important August employment report on Friday.
4. Salesforce among firms to report
On the earnings front, software firm Salesforce is expected to unveil its latest returns after the close of U.S. stock markets.
The results come as worries are growing that cracks may be emerging in a longstanding artificial intelligence boom that has underpinned stocks during a time of elevated valuations and broader economic uncertainty, according to analysts at Vital Knowledge.
"[S]entiment has been cautious amid concerns about AI displacement risk, although the narrative has started to shift in the favor of enterprise software in the last couple of weeks thanks to some solid earnings reports from the industry," the analysts wrote in a note.
Low-cost retailer Dollar Tree is also among the names set to report later today, with investors on the lookout for updates on its turnaround strategy. Peers like Dollar General, Target, and Walmart have recently posted "decent sales" as well, the Vital Knowledge analysts said. Hewlett Packard, Campbell’s, and Macy’s are also due to announce quarterly figures.
5. Gold briefly hits record high
Gold prices steadied, hitting an all-time peak as persistent concerns over global fiscal health and U.S. trade tariffs kept traders biased towards safe haven assets.
Spot gold was down slightly at $3,530.23 an ounce, while gold futures for December were up 0.1% to $3,596.30/oz by 03:25 ET. Spot gold briefly hit a record high of $3,547.09/oz earlier in the session.
But bullion’s gains were held back by a recovery in the dollar, which recouped a bulk of its losses this week as a selldown in government bonds across the globe pushed traders into U.S. markets.
The yellow metal, along with its precious and industrial peers, was still sitting on strong gains so far this week.
Among industrial metals, London copper futures temporarily rose above $10,000 a ton for the first time since March, amid increasing optimism that demand in top importer China will improve.