New York, 4 September (Brussels Morning Newspaper) – US stock futures edged higher on Friday, led by technology shares, as investors awaited the August employment report for fresh evidence about the strength of the American labour market and the Federal Reserve’s next interest-rate decision.
Nasdaq 100 futures were up 0.42% at 4.24am ET, while S&P 500 futures gained 0.06%, according to Reuters market data. Dow futures slipped 0.07%, leaving Wall Street positioned for a cautious opening ahead of one of the week’s most closely watched economic releases.
Why are Nasdaq and S&P 500 futures rising?
Investor sentiment improved after Federal Reserve Governor Christopher Waller indicated he could support keeping interest rates unchanged if incoming data showed inflation pressures were easing.
Reuters reported that traders subsequently put the probability of a Federal Reserve rate increase at around 50%, down from approximately 63% before Waller’s comments. His remarks helped equities recover after a subdued start to September.
Felix Vezina-Poirier, chief strategist at BCA Research, told Reuters that Waller’s comments were particularly important because they represented the final major Fed commentary before the blackout period surrounding September’s policy meeting. He added that Waller had previously been “ahead of the curve” during both tightening and easing cycles.
Individual stocks were also moving sharply before the opening bell. Lululemon Athletica shares dropped about 17.7% in pre-market trading after the company reduced its full-year profit and revenue forecasts. Adobe fell around 3.2% following news that long-serving chief executive Shantanu Narayen would hand leadership to company insider Anil Chakravarthy.
Why does the US jobs report matter for markets?
Attention is centred on the August employment figures from the US Bureau of Labor Statistics. Economists surveyed by Reuters expect nonfarm payrolls to have increased by about 56,000 after employment unexpectedly declined by 23,000 in July. The unemployment rate is forecast to remain at 4.1%.
The official July report showed not only a decline in payroll employment but substantial downward revisions to previous months. May’s gain was revised from 129,000 to 63,000, while June was lowered from 57,000 to 20,000. Together, the revisions removed 103,000 previously reported jobs.
The Bureau of Labor Statistics has scheduled the August employment report for 8.30am ET on Friday.
The figures could therefore influence US stock futures, Treasury yields and expectations surrounding the Federal Reserve’s September meeting. A weaker labour market could reinforce arguments for holding rates steady, although policymakers remain focused on persistent inflation pressures.
What happens next for Wall Street?
Investors will assess the payroll figures alongside unemployment and wage data before US markets open. The immediate reaction could determine whether the technology-led recovery seen on Thursday extends into Friday’s session.
Inflation will then return to the centre of the monetary-policy debate. Reuters reported that investors are awaiting Consumer Price Index and Producer Price Index figures due next week, which could provide further evidence about whether price pressures are easing sufficiently for policymakers to leave rates unchanged.
For US stock futures, the combination of employment data, inflation figures and Federal Reserve policy expectations is likely to remain a major influence on market direction as September progresses.
