News of the day for September 3, 2024
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U.S. stock futures are pointing down as Nvidia (NVDA) shares drag markets lower coming out of the holiday weekend; Intel (INTC) reportedly is preparing to pitch its board on plans to separate parts of the struggling chipmaker; Volkswagen looks at factory closures as it considers cost-cutting measures amid an increasingly competitive environment in Europe; Tesla (TSLA) shares are edging higher as the EV maker reportedly is looking to produce a six-seat Model Y; and China announced it would open a trade probe into Canadian rapeseed in response to a 100% tariff by the North American nation on Chinese-made EVs. Here’s what investors need to know today.
1. US Stock Futures Move Lower Following Labor Day Weekend
U.S. stock futures are lower in premarket trading after the Labor Day holiday Monday, with the Dow Jones Industrial Average, S&P 500, and Nasdaq all down less than 1%. The premarket decline comes after both the Nasdaq and S&P 500 closed August trading 1% higher Friday, while the DJIA was up by 0.6% to close at a record high for the fourth time during the week. Stock futures are being dragged by Nvidia (NVDA), whose shares are about 2% lower, continuing their slide after the chipmaker’s earnings report last week disappointed investors. This week, investors are waiting for key jobs data on Friday, which could provide indications on how steep the Federal Reserve could cut interest rates later this month, while manufacturing data later today could also impact market watchers.
2. Intel Reportedly Prepares to Present Plan to Break Up Company
Intel (INTC) Chief Executive Officer (CEO) Pat Gelsinger and other top executives at the chipmaking company are expected to present the board of directors in mid-September with plans to separate parts of the business in order to cut costs, according to a Reuters report. Company officials are looking at potentially separating the programmable chip unit Altera, the report said, but its contract chipmaking foundry operation wasn’t slated to be separated. Shares of Intel, which fell 26% in August after it reported disappointing quarterly results, are down 1% in premarket trading after surging by more than 9% Friday on reports that the company hired Morgan Stanley and Goldman Sachs to evaluate options to restructure the business.
3. Volkswagen May Close Plants as Part of Cost-Cutting Plans
Volkswagen said that cost-cutting efforts may force the German carmaker to close factories amid “particularly significant challenges” that may lead to broad restructuring, including potentially reducing production of some vehicle lines. The company also said it would end its employment protection program, a job security effort that has been in place since 1994, as it prepares for plant closures. “In light of the current challenges, further steps will be necessary to future-proof the company,” VW said in a statement to Investopedia. Last month, the company said it was considering delaying production of several models of electric vehicles (EVs).
4. Tesla Reportedly Planning 6-Seat Model Y
Tesla (TSLA) is planning to produce a six-seat version of its Model Y vehicle in China starting in late 2025, according to Reuters. The move is seen as an attempt to increase the appeal of its best-selling EV, and the company is preparing suppliers for a double-digit increase in output at its Shanghai factory, the report said. Tesla’s second-quarter earnings report revealed that profits fell amid rising AI costs and lower vehicle prices. Tesla shares are 1% higher in premarket trading.
5. China Announces Anti-Dumping Probe of Canadian Rapeseed Following EV Tariffs
Following the news last week that Canada would impose 100% tariffs on Chinese-made EVs, China has responded by opening an anti-dumping probe on rapeseed imports from Canada, which also is exacting a 25% tariff on Chinese aluminum and steel products. China is the world’s second-largest importer of rapeseed, which is used to make cooking oil, as well as for industrial purposes, with the Asian nation getting 90% of its imports of the commodity from Canada, Bloomberg reported.
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