Private payrolls data ahead, Nvidia's record close - what's moving markets
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Investing.com -- Investors await the release of fresh labor market data after numbers on Tuesday showed that job openings in the U.S. fell to their lowest level in over two years in July. Meanwhile, shares in Nvidia (NASDAQ: NVDA) close at a fresh record high as the semiconductor group and AI-darling announces a new partnership with Google (NASDAQ: GOOGL). Elsewhere, the price of Bitcoin shoots up following an appeals court ruling that could pave the way for the listing of an exchange-traded fund that tracks the popular cryptocurrency.
1. Futures edge lower ahead of fresh economic data
U.S. stock futures inched down on Wednesday, but stayed relatively close to the flatline, as investors digested weaker-than-anticipated job openings data and looked ahead to further labor market figures later in the week.
At 05:14 ET (09:14 GMT), the Dow futures contract had dipped marginally by 4 points or 0.01%, S&P 500 futures were lower by 7 points or 0.1%, and Nasdaq 100 futures fell by 37 points or 0.3%.
All three of the main indices ended the prior session higher after data showed that job openings, a proxy for labor demand, in the U.S. dropped by more than anticipated to their lowest point in nearly two-and-a-half years in July. The rate of workers quitting their jobs also decreased to a 30-month low, suggesting that employees may be seeing fewer opportunities that would persuade them to switch roles.
Meanwhile, a Conference Board consumer sentiment index reading of 106.1 missed estimates, pointing to a possible easing in the broader economy.
The numbers helped to bolster expectations that the Federal Reserve, which has been keen to slow labor demand to help cool inflation, will elect to keep interest rates steady at their next policy meeting in September.
2. Private payrolls loom amid wave of labor market data
More detail will likely be plugged into the current picture of the labor market later today with the release of private payrolls data for August.
The ADP National Employment report is projected to show that private employment rose by 195,000 during the month, down from a jump of 324,000 in July. The wave of job market data is due to roll on tomorrow when weekly claims for unemployment benefits are unveiled.
The figures will add to the backdrop for this week's main event on the economic calendar: the monthly nonfarm payrolls report. Economists predict that the U.S. economy added 170,000 jobs in August, a smaller increase compared to an uptick of 187,000 in the previous month.
Taken together, the data are expected to aid efforts to forecast the Fed's interest rate path. There is currently an 88% probability that the central bank will keep borrowing costs unchanged at a range of 5.25% to 5.50% next month, according to Investing.com's Fed Rate Monitor Tool.
On the earnings front, Jack Daniel's whiskey owner Brown-Forman (NYSE: BFb), as well as tech firms Salesforce (NYSE: CRM) and Crowdstrike (NASDAQ: CRWD), are scheduled to report their latest quarterly reports on Wednesday.
3. Nvidia's record close
Shares in Nvidia soared to their highest-ever closing price on Tuesday, bringing the chipmaking giant's market capitalization up to $1.2 trillion.
The California company has become the focal point of a recent surge in enthusiasm around the applications of generative artificial intelligence. Nvidia almost exclusively creates the chips that power the technology, giving it pole position in the race to take advantage of the AI boom.
Shares, which have more than tripled in 2023, were given even more of a boost in the prior session after Nvidia announced a new partnership with Google. The agreement will give the tech titan's clients more access to Nvidia's powerful H100 graphics processing units.
Nvidia has now accounted for just under a sixth of the S&P 500's returns this year, according to Reuters, making it the standout performer in what has been a strong annual rally across megacap tech stocks.
4. Bitcoin jumps after Grayscale appeals court win
The price of Bitcoin surged to a two-week high after a landmark decision by an appeals court in the U.S. set the stage for a spot bitcoin exchange-traded fund.
On Tuesday, the court's panel of judges ruled that the Securities and Exchange Commission was wrong to deny crypto asset manager Grayscale permission to convert its Bitcoin trust into an ETF that would track the price of the world's largest cryptocurrency. The court said Grayscale proved that its proposed Bitcoin ETF was "materially similar" to a separate futures ETF that follows agreements to buy or sell Bitcoin at a pre-determined price. The SEC has approved the Bitcoin futures ETF.
Bitcoin spiked after the move, and has risen by 5.54% to $27,407.5 over the past 24 hours as of 05:43 ET on Wednesday. Other major cap coins, including Ether, also climbed, while crypto exchange Coinbase (NASDAQ: COIN) closed nearly 15% higher on Tuesday.
Both the cryptocurrency and asset management industries have long been attempting to create a spot Bitcoin ETF, arguing that it would grant investors exposure to Bitcoin without necessarily having to own the digital token. The SEC, however, has flagged that these types of ETFs could be subjected to manipulation.
Several other parties have also applied for a spot bitcoin ETF this year, including Nasdaq Inc and BlackRock Inc (NYSE: BLK), the world’s biggest asset manager. A bulk of these filings proposed working with Coinbase to police bitcoin trading and prevent price manipulation.
5. Crude rises following U.S. inventories draw
Oil prices rose on Wednesday, extending recent gains after industry data pointed to a hefty draw in U.S. crude stockpiles, adding to concerns about a hurricane in the Gulf of Mexico.
By 05:16 ET, the U.S. crude futures traded 0.7% higher at $81.69 a barrel, while the Brent contract climbed 0.5% to $85.31. Both contracts rose over 1% on Tuesday.
Data from the American Petroleum Institute, released late Tuesday, showed that crude stocks fell by over 11 million barrels last week, suggesting healthy demand ahead of the Labor Day holiday that usually marks peak summer demand.
Additionally, Hurricane Idalia continues to head towards Florida, threatening production in the Gulf of Mexico. The region makes up about 15% of U.S. oil output and about 5% of natural gas production, according to data from the Energy Information Administration cited by Reuters. Oil group Chevron (NYSE: CVX) said it had evacuated some staff from three platforms, although it noted that output was continuing. Meanwhile, energy infrastructure firm Kinder Morgan (NYSE: KMI) said it planned to shut a petroleum pipeline.
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