U.S. stock futures were soft on Friday as traders eyed a critical jobs report.
How are stock futures trading
-
S&P 500 futures
ES00,
+0.05%
dipped 3 points, or 0.1%, to 3826 -
Dow Jones Industrial Average futures
YM00,
+0.10%
fell 2 points, or less than 0.1%, to 33068 -
Nasdaq 100 futures
NQ00,
-0.16%
eased 35 points, or 0.3% ,to 10785
On Thursday, the Dow Jones Industrial Average
DJIA,
fell 340 points, or 1.02%, to 32930, the S&P 500
SPX,
declined 45 points, or 1.16%, to 3808, and the Nasdaq Composite
COMP,
dropped 154 points, or 1.47%, to 10305.
What’s driving markets
The jobs report on Friday looms over the market as the prospects for Federal Reserve policy dominates investor thinking.
The S&P 500 is down 19.4% from its 52-week high after the Fed raised interest rates by 425 basis points in 2022 in an attempt to crush inflation that hit a four-decade high of 9.1% in June.
Numerous Fed officials have made it clear they consider it unlikely the central bank can stop raising interest rates if the labor market continues to be robust and thus adds to inflationary pressures, particular in the services sector.
So traders will be eagerly awaiting 8:30 a.m. Eastern when the nonfarm payrolls data is published. Economists expect a net 200,000 positions were created in December, down from 263,000 the month before. The unemployment rate is forecast to stay at 3.7% and average hourly earnings are expected to have grown 0.4%, down from 0.6%.
Analysts noted that the ADP private sector employment report released on Thursday was stronger than expected and had contributed to a sell-off for stocks, a move that may be repeated if the NFP also comes in hotter than forecast,
“With the hawkish words of the Federal Reserve’s latest minutes still ringing in their ears, investors were further disappointed by an ADP employment report which showed that another 235,000 jobs were added in December,” said Richard Hunter, head of markets at Interactive Investor.
“In the current environment, any good news for the economy is tending to translate into bad news for stocks, since it shows that the hiking cycle has not yet had the desired effect in dampening demand. It also adds to the probability of higher rates for longer, until such time as the rate rises rein back the economy,” Hunter added.
Other U.S. economic updates set for release on Friday include the ISM services index for December and factory orders for November, due at 10 a.m. Fed speakers throughout the day include Atlanta Fed President Raphael Bostic at 11:15 a.m.; Fed Gov Lisa Cook at the same time; Richmond Fed President Tom Barkin at 12:15 p.m.; and Kansas City Fed President Esther George at 1 p.m.
Tech stocks may be under pressure on Friday after Samsung Electronics
005930,
said quarterly profits fell to an eight year low as it saw weaker demand for chips and smartphones.