Lisa Pauline Matakal and Johan M. Cherian
(Reuters) – U.S. stock index futures were little changed on Friday as investors awaited a key jobs report that would confirm growing slack in the U.S. labor market and give the Federal Reserve more room to cut interest rates this year.
The benchmark S&P 500 and Nasdaq ended Thursday trading slightly lower, dragged down by losses in tech stocks despite hitting intraday highs at the start of trading.
Some large technology stocks, which had fallen the previous day, rose slightly in premarket trading, but overall trading was muted ahead of the release of May nonfarm payrolls data later in the day.
Economists surveyed by Reuters expect the U.S. economy to add 185,000 new jobs in May and the unemployment rate to remain stable at 3.9 percent.
Markets have had a hard time predicting the Fed’s moves this year, with hopes of a rate cut as soon as March quickly fading as economic data showed a tight labor market and persistent inflationary pressures.
But Thursday’s weekly jobless claims figures were the latest in a string of data suggesting the labor market is easing, which could give policymakers more confidence they can ease interest rates while avoiding a resurgence in inflation.
“While payroll numbers are, as always, a bit of a luck-based headline, labour market figures over the past few days confirm that the labour market is on an easing path,” ING analysts said in a note.
Traders currently see a 68% chance of a rate cut in September, according to CME’s FedWatch tool, and are pricing in about two cuts this year, according to LSEG data.
New inflation data is due to be released next week, just before the Fed concludes its two-day policy meeting on June 12. The Fed is expected to keep interest rates on hold, but traders will be awaiting updated economic and policy forecasts for clues about the timing and pace of future rate cuts.
Artificial intelligence darling Nvidia fell 0.4% and was on track to extend a day’s losses after its valuation fell below $3 trillion, once again making it the world’s third-largest company behind Apple.
The chipmaker’s long-awaited 1-for-10 stock split is scheduled for after the market close, which could make the stock price, which is over $1,000, cheaper for investors.
As of 7:14 a.m. ET, the Dow e-minis were down 30 points (0.08%), the S&P 500 e-minis were down 5.5 points (0.10%) and the Nasdaq 100 e-minis were down 3.75 points (0.02%).
GameStop Corp., in particular, fell 5.4% in volatile trading after announcing a possible initial public offering and declining quarterly sales. The company’s shares had initially surged after stock influencer “Roaring Kitty” was expected to return to YouTube at 12 p.m. ET on Friday.
Other so-called meme stocks edged higher, with AMC Entertainment and Koss Corp. dropping 7.8% and 12.5%, respectively. Retail trading platform Robinhood rose 0.8%.
Lyft shares rose 2.9% after the market closed on Thursday after the company forecast total bookings would grow 15% annually through 2027.
(Reporting by Lisa Matakkal and Johan M. Cherian in Bengaluru; Editing by Pooja Desai)
