United Auto Workers Launched an Unprecedented Strike

Good morning.

Wall Street index futures were mixed on Friday as shares of Ford and General Motors as well as chip-equipment makers declined in premarket trading, while investors remained optimistic about a likely pause in U.S. interest-rate hikes.

The United Auto Workers launched an unprecedented strike against the “Detroit Three” on Friday after negotiations over union demands faltered and the employees’ four-year contracts with the companies expired at midnight. A walkout by more than 12,000 autoworkers on Friday could slow an outperforming U.S. economy should it drag on – even risking the first monthly net drop in payroll employment in nearly three years. Should it widen in the weeks ahead to include all 146,000 UAW members at the three companies, it could become the largest automotive industry strike in a quarter century.

Applied Materials, Lam Research and KLA Corp dropped over 2% each after Reuters reported Taiwan’s TSMC, the world’s top chipmaker, had asked vendors to delay delivery of high-end chipmaking equipment, weighing down Nasdaq futures.

Shares of SoftBank’s Arm Holdings rose before the bell on Friday, extending gains from a stellar Nasdaq debut that valued the British chip designer at $65 billion.

Today, all eyes are focused on the U.S. Michigan Consumer Sentiment preliminary reading. Economists, on average, forecast that the Michigan consumer sentiment index will stand at 69.1 in September, compared to the previous value of 69.5. U.S. Manufacturing Production data will be reported today as well. Economists expect August’s figure to be +0.1% m/m, compared to the previous value of +0.5% m/m.

WTI crude futures strengthened above $90 per barrel. Gold rose above $1,910 an ounce while the yield on the 10-year US Treasury note rose toward the 4.3% mark.

Have a great weekend!