Stocks Drift as Focus Turns to Labor Data and AI: Markets Wrap

(Bloomberg) — US stocks and Treasuries struggled for direction as traders held fire ahead of the week’s first labor data release and a string of artificial-intelligence events. Oil wavered.

S&P 500 futures were little changed after the index erased gains for the month in the previous session. The lack of conviction was evident in bonds too, leaving the 10-year yield near a 19-year high. The dollar inched higher. Brent crude fluctuated as traders waited for signs of progress in US-Iran peace talks.

Markets are finding their footing after a turbulent start to the week that saw volatile oil prices trigger selling across stocks and bonds. Among potential catalysts, traders will closely follow what emerges from a lunch meeting on AI safety risks between US President Donald Trump and industry leaders.

A busy stretch of labor-market data also kicks off with the release of the August job openings report. Traders will parse remarks from six Federal Reserve speakers for clues on the rate outlook at a time when markets are pricing as many as four hikes over the next 12 months.

“We’ve had some rather large moves over the last few days or so, and we’ll have the ultimate data trigger in the form of non-farm payrolls heading into Friday, so I think it makes sense for positions to be squared,” said Geoff Yu, a senior macro strategist at BNY. “Also worth bearing in mind it’s month-end, so there will be these passive transactions which are not aligned to data.”

Stocks have proved resilient in recent weeks even as higher borrowing costs cloud the outlook for growth and corporate earnings. Still, questions remain over whether chipmakers and other AI-linked stocks can keep pushing higher given concerns about valuations and whether capital outlays can be justified.

Worries that AI may cause harm have also moved to the fore, leading some industry executives, including Anthropic PBC head Dario Amodei, to call for a slowdown in the technology’s development.

As Amodei and others prepare to meet Trump, traders will also listen what OpenAI Chief Executive Officer Sam Altman has to say about the issue at the group’s annual developer conference. The ChatGPT chatbot owner is holding back a version of its Astra model to put stronger guardrails in place.

The impact of rising inflation was on display Tuesday when Australia’s central bank lifted borrowing costs to the highest level in about 15 years. In Spain, inflation moved further above the European Central Bank’s 2% target, reinforcing the case for higher euro-area rates.

Meanwhile, UK gilts outperformed European peers as markets waited for Prime Minister Andy Burnham to address the ruling Labour Party in Liverpool. Officials expect Burnham could signal he wants to begin a conversation about reforming the state pension to help pay for social care.

Corporate Highlights:

Health and fitness ring-maker Oura Inc. will delay its planned initial public offering on Nasdaq due to uncertainty in the market for first time offerings. Shareholders in the Shell Plc-led LNG Canada venture greenlit plans to double its liquefied natural gas export capacity, forging ahead with the multibillion-dollar investment as key customers in Asia face the biggest supply shock of recent times. Goldman Sachs Group Inc.’s board has discussed a plan where Waldron, who is currently chief operating officer, would succeed David Solomon as CEO as early as next year, the Wall Street Journal reported. Julius Baer Group Ltd. said the Swiss regulator Finma has ended its enforcement procedure against the bank and it has submitted a share buyback request.

Some of the main moves in markets:

Stocks

The Stoxx Europe 600 rose 0.5% as of 11:20 a.m. London time S&P 500 futures were little changed Nasdaq 100 futures were little changed Futures on the Dow Jones Industrial Average were little changed The MSCI Asia Pacific Index fell 0.7% The MSCI Emerging Markets Index fell 0.4% Currencies

The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.3% to $1.1339 The Japanese yen fell 0.1% to 157.60 per dollar The offshore yuan was little changed at 6.7063 per dollar The British pound fell 0.2% to $1.3225 Cryptocurrencies

Bitcoin rose 0.7% to $84,076.85 Ether rose 1.2% to $2,713.9 Bonds

The yield on 10-year Treasuries was little changed at 5.24% Germany’s 10-year yield declined two basis points to 3.63% Britain’s 10-year yield declined three basis points to 5.39% Commodities

Brent crude fell 0.2% to $105.09 a barrel Spot gold rose 0.8% to $4,148.96 an ounce This story was produced with the assistance of Bloomberg Automation.

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