In a session marked by caution, global stocks saw a downturn as traders braced for upcoming economic data that could provide crucial insights into the health of the US economy and the Federal Reserve’s future interest rate decisions. This risk-off sentiment led to a rally in the yen and an advance in the dollar, underscoring the market’s apprehension.

Wall Street Prepares for a Volatile Reopening

Futures contracts for the S&P 500 dropped by 0.5% ahead of Wall Street’s reopening, following a session on Friday where the index closed just shy of its all-time high. This dip comes as traders anticipate increased volatility, especially given September’s historical reputation as a challenging month for stocks. The market is also focused on the Federal Reserve, with swap traders pricing in a roughly 20% chance of a 50 basis-point rate cut in the near future, according to Bloomberg data.

Notably, Nvidia Corp. experienced a premarket drop of over 2%, with most of the “Magnificent Seven” technology stocks losing ground. This group, which has driven much of the market’s gains this year, now faces renewed pressure as investors reassess valuations amid a potential economic slowdown.

Key Movers in the Market

United States Steel saw a sharp decline of 6% following remarks by Vice President Kamala Harris, who opposed the planned sale of the company to Japan’s Nippon Steel. Speaking at a Labour Day rally in Pittsburgh, Harris emphasized the importance of maintaining strong American steel companies, labeling United States Steel as a “historic American company” crucial to national interests.

Boeing shares slipped by 3% after Wells Fargo downgraded the stock from equal weight to underweight. Analyst Matthew Akers pointed to peaking free cash flows as the rationale behind the downgrade, signaling potential challenges ahead for the aircraft manufacturer.

In contrast, Unity Software rallied by 6% after Morgan Stanley upgraded the stock to overweight from equal weight. The investment bank highlighted Unity’s strong position as “the clear game engine” and noted that derisked forward estimates could act as catalysts for future growth.

Bank of America saw a slight decline, with shares down fractionally. This comes on the heels of Warren Buffett’s Berkshire Hathaway continuing to trim its holdings in the bank, following a trend that began earlier this summer.

Merck remained relatively stable after announcing that the European Commission approved a combination of drugs, including Merck’s Keytruda, for the treatment of bladder cancer. While the news is significant, it had little immediate impact on the pharmaceutical giant’s stock.

As traders navigate this period of uncertainty, all eyes are on the upcoming economic reports and the Federal Reserve’s next moves. With volatility expected to rise, investors will need to stay vigilant and be prepared for potential market swings in the coming weeks.