Stock market today – 8/2: Stocks fall as Pelosi’s visit to Taiwan boosts risk-free bets

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U.S. stock index futures were lower on Tuesday as investors moved to cut risk ahead of an upcoming visit by House Speaker Nanci Pelosi to Taiwan, the first visit by a senior government official. American in more than 25 years, stoking concern over rising tensions between the United States and China.

Dow Jones Industrial Average futures were 144 points lower, or 0.5%. S&P 500 futures slid 0.7% and Nasdaq 100 futures fell 0.8%.

U.S. government debt prices rose Tuesday morning as investors awaited Pelosi’s trip to Asia and awaited Friday’s jobs report.

The yield on the benchmark 10-year Treasury fell to 2.553% and the yield on the 30-year Treasury also fell to 2.891%. Yields move inversely to prices.

The pre-market moves came as stocks slipped on the first regular trading day of August after all major averages ended their best month since 2020. The S&P 500 fell 0.28% to end at 4,118.63 while the Nasdaq Composite edged down 0.18% and closed at 12,368.98. The Dow Jones Industrial Average slipped 46.73 points, or 0.14%, to end at 32,798.40.

Pelosi is due to arrive in Taiwan on Tuesday evening local time and meet with Taiwanese government officials, in what would be the first visit by a Speaker of the House to the democratically-ruled island since 1997.

Beijing, which claims Taiwan as part of its territory, has warned Pelosi and the US administration not to set foot there. Chinese officials have threatened unspecified military countermeasures if his visit continues.

Taiwan is a self-governing democratic island that China considers a runaway province, and Beijing has expressed opposition to Pelosi’s trip.

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“We would like to tell the United States once again that China is here, the Chinese People’s Liberation Army will never stand idly by, and China will adopt resolute responses and strong countermeasures to defend its sovereignty and territorial integrity,” the Chinese Foreign Ministry spokesperson said. Zhao Lijian said during a daily briefing on Monday.

“Whatever actions Beijing takes could trigger additional sanctions against China and greatly increase the risk of a direct military skirmish between the United States and China,” said Chen Zhao, chief strategist of China. global economic research firm Alpine Macro. “It is prudent for investors to anticipate and find ways to protect their portfolios against the risk of a full-scale military confrontation between China and the United States”

On the economic data front, investors are awaiting the July nonfarm payrolls report this week, due out on Friday, for further clues about the state of the economy and the labor market. More revenue data to be released Tuesday with reports from Uber (UBER) – Get the report from Uber Technologies Inc.Starbucks (SBUX) – Get the Starbucks Corporation reportPayPal (PYPL) – Get the PayPal Holdings Inc. report.Advanced micro-systems (AMD) – Get the Advanced Micro Devices Inc.and more.

SVC Health (SVC) – Get the CVS Health Corporation report, Yum! Brands (YUM) – Get yum! Report Brands Inc.MGM Resorts (MGM) – Get MGM Resorts International Report and eBay (EBAY) – Get the report from eBay Inc. will release their second-quarter results on Wednesday, while Alibaba (BABA) Eli Lily (THERE IS) – Get the report of Eli Lilly and companyDiscovery of Warner Bros. (WBD) – Get the Warner Bros. report. Discovery Inc.Amgen (AMGN) – Get the report from Amgen Inc. and Block (SQ) – Get the Class A report from Block Inc. will release its second-quarter numbers on Thursday.

Among specific stocks, Pinterest (PINS) – Get Class A report from Pinterest Inc. shares rose more than 18% to $23.68 in premarket trading after the online visual inspiration board company reported weak second-quarter results, which it said were hit by a decline advertising revenue as well as an increase in costs, but an increase in the number of users.

The company has seen weakness among advertisers in the consumer packaged goods category, big-box retailers and mid-market advertisers, Chief Financial Officer Todd Morgenfeld said, adding that the digital advertising environment will continue to be difficult.

Activist investor Elliott Management separately confirmed he was Pinterest’s lead investor and said he was “convinced of the value creation opportunity” of the company.

caterpillar (CAT) – Get the Caterpillar Inc. report., meanwhile, announced its second-quarter results before the opening bell that comfortably exceeded analysts’ forecasts. The heavy equipment maker, seen as an economic indicator in terms of demand for its machinery, posted adjusted earnings per share of $3.18 on sales of $14.2 billion.

Wall Street was looking for about $3.03 in adjusted earnings per share on about $14 billion in equipment sales.

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