Written by Johan M. Cherian and Purvi Agarwal
(Reuters) – U.S. stock index futures were flat to slightly higher on Friday as investors refrained from making big moves ahead of key jobs data and tracked possible escalation in geopolitical tensions in the Middle East. .
The Department of Labor's nonfarm employment report, to be released at 8:30 a.m. ET, is expected to show the economy maintains a modest pace of job growth while the unemployment rate stabilized in September. There is. The numbers could shed light on the central bank's policy trajectory for the rest of the year.
If the numbers are close to expectations, further rate cuts are likely to be shallower than September's 50 basis point cut, said Jerome Powell, head of equity research at Hargreaves Lansdown, Deren Nathan. This confirms the Fed chairman's suggestion.
“With the global geopolitical outlook deteriorating, investors will seek the reassurance of domestic economic stability,” Nathan said. There is a possibility that there will be more escapes.”
The labor market has come under increased scrutiny since the Federal Reserve cut interest rates by an unprecedented 50 basis points in September to prevent further deterioration in employment.
According to CME Group's FedWatch tool, there is a 69.5% chance that the FOMC will cut interest rates by 25 basis points in November, up from 46.7% a week ago.
A week ago, data compiled by LSEG pointed to recent reports pointing to strong service sector activity in September, with traders expecting borrowing costs to fall by 66 basis points by year-end. It has declined from around 79bp.
The Dow E-mini rose 14 points (0.03%), the S&P 500 E-mini rose 11 points (0.19%) and the Nasdaq 100 E-mini rose 61.75 points (0.31%).
Comments from New York Fed President Williams before the market opens will also attract investors' attention.
Wall Street's main indexes closed lower on Thursday, ending the first week of October on a weak note, as investors remain nervous over escalating tensions in the Middle East and worker strikes earlier this week. It was a prospect.
Analysts said such events could impact October's inflation and labor data.
In premarket trading, energy stocks including Occidental Petroleum rose 1.11%, while Exxon Mobil and Chevron rose 0.9% each, as oil prices soared on concerns about supply disruptions in the Middle East due to escalating regional conflicts.
The S&P 500's energy sector is on track for its biggest weekly gain since March 2023.
Meanwhile, ports on the East Coast and Gulf Coast began reopening late Thursday after workers reached a pay deal, but clearing backlogged cargo will likely take time. Jim Integrated Shipping Services' U.S. shares fell 8.2%.
Spirit Airlines, in particular, plunged 40% after reports that it was discussing the terms of a bankruptcy filing with bondholders following its failed merger with JetBlue Airways.
Rivian fell 8.5% after the EV startup cut its full-year production forecast and delivered fewer vehicles than expected in the third quarter.
Interest-rate-sensitive growth stocks such as Tesla Inc. and Amazon.com Inc. each rose more than 1.2%, while semiconductor stocks such as Nvidia Inc. and Advanced Micro Devices Inc. were little changed.
(Reporting by Johann M Cherian and Purvi Agarwal in Bengaluru; Editing by Pooja Desai)
