(Reuters) -Wall Street’s main indexes were poised for a lower open on Tuesday as higher Treasury yields weighed on major growth stocks, while downbeat data on services activity in China stoked worries over demand in the world’s second largest economy.
Yield on the 10-year Treasury notes climbed to 4.23%, while two-year yield rose to 4.93%, ahead of more economic data and the U.S. Federal Reserve’s policy meeting later this month.
Major technology-linked stocks such as Apple (NASDAQ:AAPL), Nvidia (NASDAQ:NVDA), Meta Platforms (NASDAQ:META) and Netflix (NASDAQ:NFLX) lost between 0.4% and 1.0% before the bell.
“Investors are grappling with what we consider to be a still relatively weak economic and profit environment for the average corporation,” said Jason Pride, chief of investment strategy and research at Glenmede.
“The recession is definitely delayed within the United States … we are seeing fairly weak economic environments in both China and Europe.”
China’s services activity expanded at the slowest pace in eight months in August, a private-sector survey showed, as weak demand continued to dog the world’s second-largest economy and stimulus failed to meaningfully revive consumption.
U.S.-listed shares of Chinese companies including PDD Holdings, JD (NASDAQ:JD).com, Baidu (NASDAQ:BIDU) and Alibaba (NYSE:BABA) fell between 0.7% and 1.5%.
U.S. economic data since the Fed’s July meeting has added to the impression the economy is cooling without cracking, likely bolstering the case against further interest rate increases.
All three main U.S. stock indexes logged gains in the previous week after a raft of data pointed to a softening labor market. Investor focus will now shift to the consumer price index data due next week and the Fed’s policy decision due on Sept. 20.
Traders’ bets that the Fed will leave rates unchanged in the next policy meeting stood at 93%, while pricing in a 58.2% chance of a pause in November, up from 52% a week earlier, according to the CME FedWatch tool.
Meanwhile, Goldman Sachs lowered the chances of a U.S recession in the next 12 months to 15% from 20% amid continued easing inflation and labor market data.
Investors now await factory orders data for July due at 10 a.m. ET.
At 8:28 a.m. ET, Dow e-minis were down 46 points, or 0.13%, S&P 500 e-minis were down 11.5 points, or 0.25%, and Nasdaq 100 e-minis were down 63.5 points, or 0.41%.
Shares of Airbnb and Blackstone (NYSE:BX) added 5.8%and 3.8%, respectively, in premarket trading as the companies were set to join the S&P 500 index.
Oracle (NYSE:ORCL) gained 1.9% after Barclays upgraded the software firm to “overweight” from “equal weight”.
Warner Bros Discovery (NASDAQ:WBD) slipped 0.8% after the media company lowered its annual core profit forecast due to the strikes by Hollywood writers and actors.
