Wall Street Awaits Payrolls Report as U.S. Stock Futures Hold Steady
U.S. stock index futures were mostly flat on Thursday as investors braced for the release of the monthly nonfarm payrolls report, which is expected to offer critical insight into the strength of the labor market and the Federal Reserve’s next moves on interest rates. The market showed little movement ahead of the data, with the S&P 500, Nasdaq, and Dow futures rising marginally. A shortened trading session is expected due to the July 4 Independence Day holiday.
On Wednesday, both the S&P 500 and Nasdaq closed at record highs, thanks to gains in technology shares and easing trade tensions following a new U.S.-Vietnam agreement. However, the Dow remains 1.3% below its all-time high from December. Anticipation is high for the June payrolls data, as analysts expect signs of a cooling labor market, including a rise in the unemployment rate to 4.3%—the highest level in over three years.
Fed Chair Jerome Powell has argued for keeping rates steady due to persistent inflation and labor market resilience. But a weaker-than-expected jobs report could shift market sentiment in favor of a July rate cut. The CME FedWatch Tool showed a 25% chance of a rate cut this month, up from 20% a week ago, highlighting how investors are recalibrating expectations.
In premarket trading, tech stocks gained momentum, particularly chip design software firms Synopsys and Cadence Design Systems, which surged after the U.S. lifted export restrictions to China. This move, coupled with upbeat investor sentiment, suggests a thawing of trade tensions between Washington and Beijing. Meanwhile, Datadog soared over 10% after being added to the S&P 500, replacing Juniper Networks.
Elsewhere, economic indicators due Thursday include weekly jobless claims and service sector activity data from S&P Global and ISM. On the fiscal front, House Republicans moved President Trump’s massive tax-and-spending package closer to approval despite concerns about its projected $3.4 trillion impact on the national debt. As investors weigh both economic and political developments, market caution remains high.
Source: Reuters