US Markets Open In Red After Labor Day Weekend; US Crude Oil Future Drops Over 1%

The US markets fell on Tuesday following the Labour Day weekend to kick off September trading. The markets and bond investors also prepare to face a big employment report this week.

The three major averages kicked off Tuesday's session in the red. While the Dow Jones Industrial Average was trading 192 points lower, S&P 500 fell 0.7% and Nasdaq Composite dropped 0.9% as traders brace for a potentially tough month after a strong but volatile August.

On Tuesday stocks faced downward pressure as Nvidia, the standout artificial intelligence stock that has captivated investors for over a year, fell by more than 4%. Boeing shares also fell 4.1% after Wells Fargo downgraded the stock from Equal-Weight to Underweight. On the other hand, Moody's hit record high of $489.75.

On Friday, all three major U.S. stock indexes saw gains, with the Dow up 0.55%, the S&P 500 rising 1.01%, and the Nasdaq Composite increasing by 1.13%. The uptick came as investors reviewed a new inflation report that aligned closely with Wall Street's forecasts. August saw each index finish higher, with the Dow and S&P 500 marking their fourth consecutive month of gains.

Investors will be eyeing the first significant economic report of the month on Friday when the US government releases the August jobs report. The July employment data, released in early August, shook the stock market with its weaker-than-expected numbers, revealing an increase in the unemployment rate to 4.3%.

Additionally, Wall Street will face seasonal challenges, as September has historically been the weakest month for the S&P 500 over the past decade.

On Tuesday, US crude oil future dropped by over 1%, nearing levels last seen at the end of the previous year. This decline is attributed to anticipated production increases by OPEC+ in the coming weeks and ongoing softness in China’s economy.

West Texas Intermediate October contract fell $1.10 or 1.48% to $72.45 per barrel, Year-to-date US crude oil gain was at 1%.

Brent December contract fell over 2% at $75.17 per barrel.

Bloomberg Dollar Spot index was little changed on Tuesday, while Spot gold fell 0.3% to $2,492.15 per ounce.

Bitcoin was also little changed at $59,040.18.

10-year Treasury yield on Tuesday fell 5 basis points to 3.85%.