Wall Street Opens Lower on Tariff Uncertainty

Wall Street's main indexes opened lower Tuesday, as investors returning from a long holiday weekend worried about the legality of U.S. President Donald Trump's tariffs and awaited crucial economic reports.

The Dow Jones Industrial Average fell 257.1 points, or 0.56%, at the open to 45,287.73. The S&P 500 fell 58.7 points, or 0.91%, to 6,401.51​, while the Nasdaq Composite dropped 369.0 points, or 1.72%, to 21,086.575

The August nonfarm payrolls report, due on Friday, is the centerpiece of the week and will follow a monthly private payrolls reading and job openings figures.

Markets are pricing in about a 90% chance of a 25-basis-point cut in interest rates at the Fed's meeting later this month, according to the CME Group's FedWatch tool.

Investors' dovish tilt came after July's weak job report, with Fed Chair Jerome Powell acknowledging the growing risks to the labor market at the Jackson Hole symposium, helping the S&P 500 and the Dow log their fourth consecutive month of gains in August.

The Nasdaq logged its fifth straight monthly gain last month.

Yields on longer-dated U.S. Treasuries rose on Tuesday, with those on the 10-year and 30-year notes at their highest levels in more than a month, pressuring equities.

The CBOE Market Volatility index also touched its highest mark in more than three weeks and was last up 0.99 points at 17.11.

Hedge funds remained hesitant about buying U.S. stocks at the outset of September, a seasonally dour month for markets, according to Goldman Sachs data up to August 25.

The benchmark S&P 500 has lost 1.5% on average in September - its worst month - since 2000, according to data compiled by LSEG.

The rate-cut optimism overshadowed concerns about the Fed's independence as U.S. President Donald Trump kept up attacks on the central bank. Uncertainty over artificial-intelligence-fueled trade also crept in after quarterly updates from some AI-linked companies failed to impress investors.

The markets will also focus on quarterly earnings from a host of retailers, including Macy's and Dollar Tree , to gauge the strength of the U.S. consumer as the impact of Trump's tariffs on the economy starts to show.

U.S. manufacturing activity data for August is due after markets open.

In stocks, gold miners gained in premarket trading after bullion prices hit a record high. U.S.-listed shares of Harmony Gold rose 6.2%, Kinross Gold gained 2.7% and Newmont added 1.5%.

Fortinet dipped 2.7% after Morgan Stanley downgraded the cybersecurity firm's stock to "underweight" from "equal-weight."