Investing.com — U.S. stock futures were trading below flat on Friday as investors awaited a long-awaited labor market report that could influence the Federal Reserve's next monetary policy decision.
By 6:21 a.m. ET (10:21 a.m. GMT), the contract was down 130 points, or 0.3 percent, down 34 points, or 0.6 percent, and down 207 points, or 1.1 percent.
Both the 30 index and the benchmark ended the previous trading day lower, while tech-heavy stocks rose.
Trading was choppy on Thursday as investors analyzed data showing that U.S. employers hired the lowest number of workers since 2021 in August, but a drop in jobless claims and separate figures suggesting stronger service sector activity eased some concerns about a worsening U.S. labor market.
So far this month, the S&P 500 is down more than 2.5%, with September historically considered a weak month for stocks.
“[T]”The mood in global equity markets remains gloomy as stocks extended recent declines amid ongoing concerns about growth prospects,” analysts at Vital Knowledge said in a client note, adding that optimism around artificial intelligence was “fading” following the earnings report from US chipmaker Broadcom (more on that below).
Nonfarm payrolls released
Economists project that the U.S. economy added 164,000 jobs last month, up from 114,000 the previous month. The much weaker-than-expected July total triggered a broader market sell-off as traders worried about a possible U.S. recession.
This time around, the data could have a major impact on how the Federal Reserve approaches potential interest rate cuts at its two-day meeting on Sept. 17-18.
According to CME Group's (NASDAQ:) closely monitored FedWatch tool, there's about a 59% chance the Fed will opt to cut borrowing costs by 25 basis points, which are currently at a 23-year high of 5.25% to 5.5%.
But another weak jobs report could spur further concerns about a slowing employment situation and prompt the Fed to cut interest rates by another 50 basis points, some analysts predict.
Broadcom's sales outlook disappoints
Broadcom Inc. (NASDAQ:) shares fell more than 9% in premarket trading on Wednesday after the company's current-quarter revenue guidance fell slightly short of investor expectations.
The company forecast fourth-quarter sales of $14 billion, slightly below expectations of $14.04 billion, according to LSEG data cited by Reuters, a forecast seen as a sign of possible weakness in the company's non-AI-related businesses.
But Broadcom said its AI division remains strong: The company again raised its full-year outlook for sales of AI components and custom chips to $12 billion, from a previous forecast of more than $11 billion for the period.
Other semiconductor stocks, including artificial intelligence (AI) darling Nvidia (NASDAQ:) and peer Advanced Micro Devices (NASDAQ:), also fell following Broadcom's report. Marvell Technology (NASDAQ:) and Micron Technology (NASDAQ:) also fell in pre-market trading.
Oil prices steady as jobs market data looms
Oil prices rose in early European trade as investors awaited the release of non-farm payrolls data and factored in both a large withdrawal of U.S. crude oil inventories and plans by OPEC+ producers to delay production.
As of 6:21 a.m. ET, crude oil futures were up 0.5% to $73.05 a barrel, while WTI futures were up 0.5% to $69.50 a barrel. Both futures are expected to decline this week.
Analysts quoted by Reuters said investors were turning cautious ahead of the jobs report, especially after the previous month's figure triggered selling in global markets.
Meanwhile, U.S. crude oil inventories fell by 6.9 million barrels to 418.3 million barrels in the week to Aug. 30, the Energy Information Administration said on Thursday. Analysts had expected a fall of 1 million barrels, Reuters reported.
Meanwhile, the OPEC+ group of oil-producing countries said they had agreed to postpone plans to increase crude oil production in October and November.
Despite the support from these developments, Brent crude closed at its lowest in more than a year on Thursday, due in part to lingering concerns about U.S. and Chinese demand.
Reuters contributed to this report.
