U.S. stock futures flat as investors await July jobs report

U.S. stock-index futures were treading water Friday morning, with recession-wary investors awaiting official July employment data in order to gauge the strength of the economy and assess the pace and scope of Federal Reserve interest rate hikes as policy makers attempt to get a grip on inflation.

What’s happening
  • Futures on the Dow Jones Industrial Average
    YM00,
    +0.19%

    rose 27 points, or 0.1%, to 32,708.

  • S&P 500 futures
    ES00,
    +0.11%

    were off 2.25 points, or 0.1%, at 4,150.

  • Nasdaq-100 futures
    NQ00,
    +0.05%

    lost 22 points, or 0.2%, to trade at 13,305.

Stocks logged a mixed finish on Thursday, with the Dow
DJIA,
-0.26%

losing 85.68 points, or 0.3%, while the S&P 500
SPX,
-0.08%

edged down 0.1% and the Nasdaq Composite
COMP,
+0.41%

gained 0.4%.

Market drivers

The U.S. July jobs report is due at 8:30 a.m. Eastern. Nonfarm payrolls in July are expected to have risen by 258,000, down from 372,000 in the previous month, a poll of economists by The Wall Street Journal estimates. If so, it would mark the smallest increase since December 2021.

Announcements of layoffs by a number of high profile companies have raised concerns that a robust labor market may be softening.

See: Hiring slowdown? U.S. seen adding just 258,000 jobs in July

A payrolls print around 250,000 “would likely keep the Fed on its current hawkish path. Fed policymakers took to the airwaves this week to strongly push back against market expectations of rate cuts as early as 2023, going out of their way to telegraph that their fight against inflation is far from done,” said Raffi Boyadjian, lead investment analyst at XM, in a note.

Despite jumbo-sized rate increases that have lifted the fed-funds rate to 2.25%-2.50%, hawkish Fed officials have indicated they see the rate peaking closer to 4%, but investors aren’t convinced as they see “too many red flags” pointing to downside growth risks, including a rise Thursday in weekly jobless claims to 260,000, Boyadjiian said.

“Any big disappointment in today’s jobs report would likely fuel concerns that the U.S. labor market is cooling a lot faster than anticipated and further stoke recession fears,” he said.

Geopolitical tensions remain an undercurrent for markets. China conducted “precision missile strikes” Thursday in waters off Taiwan’s coasts as part of military exercises that have raised tensions in the region to their highest level in decades following a visit by U.S. House Speaker Nancy Pelosi to the island.

Five of the missiles fired by China landed in Japan’s Exclusive Economic Zone off Hateruma, an island far south of Japan’s main islands, Japanese Defense Minister Nobuo Kishi said. He said Japan protested the missile landings to China as “serious threats to Japan’s national security and the safety of the Japanese people.”

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Companies in focus
  • Tesla Inc.
    TSLA,
    +0.40%

    shareholders on Thursday approved a proposal expected to lead to a 3-for-1 stock split and sided with the company on most of the proposals up for a vote. Shares were off 0.5% in premarket trade.

  • Meme-stock favorite AMC Entertainment Holdings Inc.
    AMC,
    +2.47%

    late Thursday announced a special dividend in the form of “Ape” preferred shares. AMC shares fell 9%.

  • Shares of Twilio Inc. TWLO fell 9.6% after the software company’s outlook came in below Wall Street expectations following a reported beat in the previous quarter.

  • DoorDash Inc.
    DASH,
    +2.34%

    shares jumped 11% after the company late Thursday reported continued growth in the second quarter, saying that its food-delivery business remains healthy despite economic uncertainty, though its loss was worse than what Wall Street expected.

  • Shares of Cloudfare Inc.
    NET,
    +0.12%

    jumped 18% after the cybersecurity company reported results late Thursday that topped Wall Street expectations and hiked its revenue outlook for the year.

  • Beyond Meat Inc.
    BYND,
    -7.81%

    shares fell 3% after the maker of plant-based meat substitutes Thursday afternoon posted a larger-than-expected net loss and smaller-than-expected revenues, while announcing layoffs.

  • Block Inc.
    SQ,
    +1.85%

    shares fell 7% after the payment-technology company late Thursday swung to a loss and projected that July volume growth for the Square seller business would be lower than what was expected in the second quarter when looking on a year-over-year basis.

  • Carvana Co.
    CVNA,
    -3.90%

    shares jumped 8.5%, though the used-car retailer missed expectations with its second-quarter revenue and logged a larger loss than analysts were anticipating.

Other assets
  • The yield on the 10-year Treasury note
    TMUBMUSD10Y,
    2.700%

    rose 3 basis pints to 2.701%. Yields and debt prices move opposite each other.

  • The ICE U.S. Dollar Index
    DXY,
    +0.20%
    ,
    a measure of the currency against a basket of six major rivals, was up 0.2%.

  • Bitcoin
    BTCUSD,
    +4.08%

    rose 2.4% to trade above $23,200.

  • The U.S. oil benchmark
    CL.1,
    -0.55%

    fell 0.7% to trade below $88 a barrel, while gold futures
    GC00,
    -0.19%

    were off 0.3% near $1,801 an ounce.

  • The Stoxx Europe 600
    SXXP,
    -0.19%

    fell 0.3%, while London’s FTSE 100
    UKX,
    -0.11%

    was down 0.2%.

  • The Shanghai Composite
    SHCOMP,
    +1.19%

    ended with a gain of 1.2%, while the Hang Seng Index
    HSI,
    +0.14%

    in Hong Kong rose 0.1% and Japan’s Nikkei 225
    NIK,
    +0.87%

    gained 0.9%.

The Associated Press contributed to this report.

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