(Reuters) – Futures tracking Wall Street’s main indexes were subdued on Friday as investors awaited a crucial jobs report to look for signs of a slowing labor market, a key factor in dictating the path of interest rates.
After a slew of mixed jobs reports through the week, the more comprehensive non-farm payrolls data on Friday is expected to show U.S. job growth slowed moderately in September, increasing by 170,000 after rising 187,000 in August.
The labor market has managed to withstand the onslaught of the Federal Reserve’s aggressive rate-hike campaign, worrying investors that the central bank would keep its monetary policy tighter for a longer duration in its fight against inflation.
Meanwhile, the unemployment rate probably retreated from a 1-1/2-year high, with wage gains expected to remain elevated.
“While the (expected) slowdown is notable, achieving such a figure would not be disastrous and so the market is likely to take the view that the economy is still resilient and interest rates will stay higher for longer,” said Russ Mould, investment director at AJ Bell.
Traders put the chance of interest rates remaining unchanged in November and December at around 82% and 64%, respectively, according to CME’s FedWatch tool.
Investors will also keenly monitor if the data sparks any major moves in Treasury yields, which have largely eased from their highs, but remain at elevated levels.
Federal Reserve officials on Thursday indicated little concern that the recent rise in yields could imperil a “soft landing” for the economy, and said it could actually help the central bank in its fight against inflation.
Focus will also be on the third-quarter earnings season, with major banks including JPMorgan Chase, Wells Fargo, Citigroup and asset manager BlackRock reporting next week.
At 5:20 a.m. ET, Dow e-minis were up 17 points, or 0.05%, S&P 500 e-minis were up 2.25 points, or 0.05%, and Nasdaq 100 e-minis were up 15.25 points, or 0.1%.
Among individual movers, Elon Musk-led Tesla fell 1.3% in premarket trading after cutting prices of its Model 3 and Model Y vehicles in the U.S.
Exxon Mobil lost 1.5% after sources told Reuters that the largest U.S. oil producer was in advanced talks to acquire Pioneer Natural Resources. Pioneer’s stock jumped 10.4%.
(Reporting by Ankika Biswas in Bengaluru; Editing by Anil D’Silva)
