Futures slip on economic growth worries ahead of labor data

(Reuters) – Futures tied to Wall Street’s main indexes slipped ahead of labor data expected later on Wednesday as worries lingered about the health of the U.S. economy.

Wall Street’s main indexes logged their biggest one-day loss since early August on Tuesday after investors dumped technology-related stocks in a dour start to what has been a historically weak month for U.S. equities.

The risk-off mood was exacerbated by data that showed manufacturing activity remained in contractionary territory, nearly a month after signs of softening labor demand sparked a global market rout.

Traders now await July’s Job Openings and Labor Turnover Survey due at 10 a.m. ET on Wednesday for clues about the size of the Federal Reserve’s expected interest rate cut in September.

Markets see a 61% chance of the U.S. central bank cutting interest rates by 25 basis points, according to CME Group’s (NASDAQ:CME) FedWatch Tool, while that of a 50 bps cut has increased to 39% from around 31% a day earlier.

Data on July factory orders and the Fed’s survey, known as the “Beige Book”, are also expected on Wednesday.

At 05:30 a.m. ET, Dow E-minis were down 82 points, or 0.20%, S&P 500 E-minis were down 18.75 points, or 0.34%, and Nasdaq 100 E-minis were down 100 points, or 0.53%.

Chip stocks, that have led much of this year’s rally on the prospects of artificial intelligence, fell sharply on Tuesday, with the Philadelphia SE Semiconductor index falling 7.8% to notch its steepest one-day drop since the COVID-19 pandemic.

Nvidia (NASDAQ:NVDA) fell 0.8% in premarket trading on Wednesday after a report said the U.S. Department of Justice sent a subpoena to the AI chip firm as it deepens its probe into the company’s antitrust practices.

A 10% slump in the previous session wiped off a record $279 billion from Nvidia’s market capitalization – the biggest ever single-day decline in market value for a U.S. company.

Other growth stocks such as Tesla (NASDAQ:TSLA) lost 0.8%, Apple (NASDAQ:AAPL) shed 0.9% and Microsoft (NASDAQ:MSFT) slipped 0.5%.

Among others, Zscaler (NASDAQ:ZS) forecast fiscal 2025 revenue and profit below estimates, sending the cybersecurity company’s shares down 15%.

PagerDuty (NYSE:PD) fell 15.2% after the digital operations management platform forecast downbeat revenue for the third quarter, while GitLab jumped 17% after the software development tools provider lifted its annual revenue forecast.