US stock futures pulled back on Friday as cautious investors waited for the crucial monthly jobs report to help shape the outlook for Federal Reserve interest-rate cuts.
Dow Jones Industrial Average futures (YM=F) edged down roughly 0.2%, while S&P 500 futures (ES=F) shed the same amount. Contracts on the tech-heavy Nasdaq 100 (NQ=F) fell about 0.3%, leading declines as the major gauges set up weekly losses.
Investors are gearing up for the December nonfarm-payrolls report to provide a health check on the US labor market, after a mixed set of recent data. Some on Wall Street see a dilemma: A strong reading could prompt the Fed to nudge rates higher, while a cool print would signal stress in the economy.
The report is expected to paint a picture of a cooling US labor market. Economists expect that 165,000 jobs were added in the month, compared with the 227,000 seen in November. Meanwhile, the unemployment rate is expected to hold steady at 4.2%.
But Fed Chair Jerome Powell and other officials have made it clear they’re slowing down on lowering rates. Given that, markets are pricing in just a 5% chance of a cut at their January meeting, with most bets on no easing before June, per the CME FedWatch Tool.
At close: January 8 at 4:43:30 PM EST
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The 10-year Treasury yield (^TNX) continued to hold near 4.7% ahead of the jobs report’s release at 8:30 a.m. ET.
Meanwhile, investors welcomed a clutch of upbeat earnings. Walgreens (WBA) posted a first quarter profit beat, a sign the healthcare company’s turnaround efforts are paying off. Shares rose over 11% in pre-market trading.
Delta (DAL) stock jumped nearly 8% after a record year for travel fueled a fourth quarter profit beat and record annual revenue for the airline.
But Nvidia (NVDA) shares came under pressure ahead of new chip export curbs expected to be announced by the White House soon. The AI chip leader criticized President Biden for the 11th hour rule changes, which is said were aimed at undercutting the incoming Trump administration.
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