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U.S. equity futures edged lower in early Friday trading, while Treasury yields and the dollar were largely unchanged, as investors braced for a key labor market release that could cement market bets for an autumn Federal Reserve rate cut.
Stocks extended gains over the first half of the holiday-shortened week, with the S&P 500 rising to its thirty-third record high of the year, as megacap tech stocks drove gains for the major indices and a pullback in Treasury yields boosted overall valuations.
Chip stocks could pace early again Friday, as well, following an update from South Korea’s Samsung, the world’s biggest chipmaker, which forecast a big surge in operating profits for the second quarter thanks to higher semiconductor prices and the ongoing AI demand surge.
The session’s larger focus, however, will fall on the June employment report, which is slated for 8:30 am Eastern time and is expected to show that around 190,000 new jobs were added to the economy last month, a modest decline from the 272,000 tally recorded in May.
Wage gains, however, are expected to slow to an annual rate of 3.9%, the slowest in three years, perhaps adding to evidence of a weakening economy and softer summer hiring intentions that could add to the case for a September rate cut.
Federal Reserve Chairman Jerome Powell and his colleagues will be closely tracking today’s June jobs report for further signs of cooling inflation pressures.
Win McNamee/Getty Images
At present, the CME Group’s FedWatch suggests no chance of a change in Fed rate when the central bank meets later this month in Washington, but pegs the odds of a quarter point move in September at around 74%.
Benchmark 10-year Treasury note yields were last seen trading at 4.334%, little-changed from Wednesday’s closing levels, while 2-year notes were trading at 4.685% heading into the job market release.
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On Wall Street, futures contracts tied to the S&P 500, which is up 16.08% for the year, are priced for a modest 5 point opening bell dip while those linked to the Dow Jones Industrial Average are priced for a 15 point pullback.
The tech-focused Nasdaq, which is up 21.1% for the year, are set for a 7 point gain.
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Tesla (TSLA) shares were a notable early mover, rising 1.8% to a premarket price of 250.84 each, a level that would edge the stock into positive territory for the year.
In overseas markets, Britain’s FTSE 100 was marked 0.27% higher in London following yesterday’s parliamentary elections that delivered a landslide victory for the center-left Labour Party headed by new Prime Minister Keir Starmer.
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The region-wide Stoxx 600, meanwhile, was marked 0.43% higher in Frankfurt with focus on the second round of parliamentary elections in France this Sunday.
Overnight in Asia, Japan’s Nikkei 225 ended 0.003% lower in Tokyo, while the regional MSCI ex-Japan benchmark edged 0.1% higher into the close of trading.
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