US stock futures are in green on Monday as sentiment seems to have stabilized amid investor concerns over Trump’s reciprocal tariffs and Federal Reserve interest rate cuts.
But, the market is also preparing for a historically bad month. According to the Stock Trader’s Almanac, August is the worst month for the Dow Jones Industrial Average since 1988, as well as the second worst month for the S&P 500 and Nasdaq Composite.
Last week, the Dow, S&P 500, and Nasdaq all fell following Trump’s executive order imposing tariffs on trading partners. The Fed rate decision, Q2 GDP, PCE inflation, and monthly payrolls were the main market happenings. The biggest movements in equities and treasuries were caused by payrolls, as the two-year yield fell on a top-line miss and, more significantly, earlier months were revised lower.
The selloff was further exacerbated by a weaker-than-expected July jobs report, which showed payrolls rise by just 73,000 and downward revisions to previous months, pointing to deeper labor market weakness.
The selloff followed Trump’s executive order imposing reciprocal tariffs of 10% to 41% on dozens of trading partners.
US Fed Rate Cut
Markets are nearly pricing in a September Fed rate cut, with over 63 basis points of easing expected by year-end. Rate futures showed a surge in positions pricing a rate drop at the next meeting, while President Trump was expected to reveal the new Fed Chairman, who would most likely favor lower rates next year, in the following days.
Pre-Market Trade
Palantir was expected to begin 2% higher ahead of its earnings release after the bell. Boeing, in turn, was due for a flat open after workers in St. Louis’ military manufacturing went on strike.
Opendoor Technologies is the most active stock in terms of volume and the stock is up over 14% in the pre-market trade. Psyence Biomedical, another low-value stock, is up over 110%, after having seen a pause in trading last week. CommScope Holding is up over 40% and Verb Technology Company is up over 28% on relatively lower volumes. Replimune Group’s low value stock price is down over 37% with no major large or mid-cap stock showing a deep cut.