Tesla shares drop after third-quarter profit falls short of estimates
Investing.com - U.S. stock futures edge higher ahead of a trading week that is set to feature crucial economic data and drama over a possible federal government shutdown. The monthly nonfarm payrolls report could offer insight into the American labor market, which may factor into how the Federal Reserve approaches monetary policy in the coming months -- but analysts are worried that the publication of the numbers could be impacted by the possible government shutdown. Meanwhile, cruise-operator Carnival is set to report its latest earnings and gold touches a new all-time peak.
1. Futures higher
U.S. stock futures were pointing higher on Monday, as investors awaited the release of a key jobs report later in the week and eyed the implications of a looming federal government shutdown.
By 02:56 ET (06:52 GMT), the Dow futures contract had risen by 161 points, or 0.4%, S&P 500 futures had climbed by 27 points, or 0.4%, and Nasdaq 100 futures had advanced by 124 points, or 0.5%.
The main averages ended in the green at the end of the last session, underpinned by fresh U.S. inflation data which broadly met expectations. Still, the three indices finished lower for the week, with the benchmark S&P 500 and tech-heavy Nasdaq Composite in particular snapping three-week winning streaks.
2. Jobs report in focus
Attention is turning to the unveiling of September’s nonfarm payrolls report on Friday, which could provide a glimpse into the state of the American labor market.
Supporting a cooling jobs picture has been a major focus for Federal Reserve policymakers. When the central bank slashed interest rates by 25 basis points earlier this month, officials widely suggested that a need to prioritize the slowing employment situation over signs of sticky inflation.
A collection of rate projections from the Fed also showed that many members are anticipating further drawdowns before the end of the year. In theory, cutting rates can spur on investment and hiring, albeit at the risk of driving up prices.
Economists are anticipating that the U.S. added 51,000 roles this month, compared to 22,000 in August. The unemployment rate, at the same time, is tipped to equal August’s level of 4.3%.
Observers have predicted that, given elevated inflation data, a strong jobs report could persuade the Fed to roll out further rate cuts at a more measured pace. But, in a note, analysts at ING said the broader jobs market "looks ominous," adding that this is partially due to "consumers themselves [...] noticing that hiring conditions are deteriorating."
3. Possible U.S. government shutdown looms large
Yet worries remain that a possible U.S. government shutdown this week may delay the publication of the jobs numbers.
Congressional lawmakers are currently facing an impending deadline to pass a stopgap funding bill before the fiscal year ends on Tuesday. If not, the federal government would enter its 15th partial shuttering since 1981.
Republicans currently control both chambers of Congress, although the votes of some opposition Democrats would be needed to pass the legislation. However, Democrats have so far rejected a short-term proposal, calling for any potential bill to reverse Republican reductions to health care programs.
Leaders from both parties in Congress are due to meet with President Donald Trump -- a Republican -- at the White House on Monday to discuss the matter. Speaking to Reuters over the weekend, Trump said he has "the impression" that Democrats may want to reach an agreement.
4. Carnival to report
Carnival Corp is due to headline the slate of company earnings on Monday, with investors keen to check in on a recent surge in popularity in sea-based vacations.
Many consumers -- wary of wider economic uncertainty -- have been opting to shell out cash on experiences like cruises, rather than on land-based options, fueling a jump in Carnival’s margins to their highest mark in almost 20 years in the second quarter.
Against this backdrop, the Holland America and Princess cruise operator lifted its annual profit outlook in June, noting that the business has shown "remarkable resilience amid heightened volatility." Analysts also said that the second-half forecast has been boosted by more favorable exchange rates.
Shares of Carnival, which is tipped by Bloomberg consensus estimates to post third-quarter per-share earnings of $1.32, have rallied by more than 22% so far this year.
5. Gold soars to new record high
Gold prices hit a record high above $3,800 per ounce as safe-haven demand was boosted by the concerns over a potential U.S. government shutdown.
Ongoing bets that the Fed will continue to lower interest rates also buoyed the yellow metal. Bullion tends to perform well when rates are brought down, as well as in times of economic or geopolitical uncertainty.
By 03:34 ET, spot gold had jumped by 1.4% to $3,810.85/oz, while gold futures had risen by 0.8% to $3,839.10/oz.
Elsewhere, broader metal prices logged strong gains, advancing against a weaker dollar after the in-line inflation data last week kept markets wagering on more rate cuts before the end of 2025.