US pre-open: Futures flat as investors show caution ahead of data barrage

(Sharecast News) - US stocks were expected to tread water on Tuesday morning as bond yields continued to edge higher ahead of some crucial economic data due out later in the week. Futures on the S&P 500, Dow and Nasdaq were all flat in pre-market trade.

The yield on a 10-year US Treasury note was up 1.5 basis points at 4.702% - a modest gain but a gain nonetheless - as government bonds were sold off in the wake of stronger-than-expected ISM manufacturing data on Monday.

Yields are continuing to set new 16-year highs as resilient economic data raises concerns that another rate hike from the Federal Reserve could come at its next meeting, as policymakers attempt to cool economic growth to fight inflationary pressures.

Markets on Monday gave an underwhelming reaction to a last-minute deal in Washington to avert a government shutdown, with Republican house speaker Kevin McCarthy now under growing pressure to quit.

"The weekend agreement by US lawmakers to fund the government until 17th November, while kicking that problem into the long grass, has merely served to refocus investor attention on the resilience of the US economy," said analyst Michael Hewson from CMC Markets.

"The agreement also shifted the odds towards another rate hike from the Federal Reserve in just under a months' time given that economic activity in the manufacturing sector appears to have bottomed out in the short term."

The only major economic data during Tuesday's session is the JOLTS job openings survey, due out at 1000 ET, which is expected to show that job openings totalled 8.8m in the month of August, down from 8.83m the month before.

Looking ahead, the next few days will see some important indicators released, including the ADP Employment Report, service-sector PMIs, factor orders, jobless claims and the all-important non-farm payrolls data on Friday. Job creation growth is widely expected to have cooled to 170,000 in September, down from 187,000 the month before.