US stock index futures inched higher on Friday ahead of the monthly jobs data which could reflect some loosening in labor market conditions, allowing the Federal Reserve to shift toward smaller rate hikes starting in December.
The Labor Department’s closely watched report, scheduled to be released at 8:30 am ET (1230 GMT), is expected show US employers likely hired the fewest workers in nearly two years in October and increased wages at a moderate pace.
Nonfarm payrolls is expected to have increased by 200,000 jobs last month after rising 263,000 in September, according to a Reuters survey of economists.
Average hourly earnings are forecast to have increased 0.3%, matching September’s gain, while the unemployment rate is seen ticking up to 3.6% from 3.5% in September.
“Overall, the labor market is probably not in quite such a strong position than earlier this year. But I would hesitate to say that it is showing material weakness yet,” said Stuart Cole, chief macro economist at Equiti Capital.
“For the Fed, this ties in with the narrative that the pace of monetary tightening can now be slowed, but that it is too early to suggest any easing up of where the end point in this tightening journey will be.”
The US central bank on Wednesday hiked its benchmark rate by 75 basis points as expected while hinting at smaller increases ahead. However, Fed Chair Jerome Powell said the “ultimate level” of policy rate would likely be higher than previously estimated.
Traders are now betting on near 60% odds of a 75-basis-point rate hike in December.
The benchmark S&P 500 and tech-heavy Nasdaq were set for their first weekly decline in three on worries Fed will keep raising interest rates until strong signs emerge that inflation is under control.
Markets could see further volatility this month with a key inflation reading due next week and as the United States gears up for midterm elections on Nov. 8 where control of Congress is at stake.
At 7:06 a.m. ET, Dow e-minis were up 197 points, or 0.62%, S&P 500 e-minis were up 29 points, or 0.78%, and Nasdaq 100 e-minis were up 84.5 points, or 0.79%.
US-listed shares of Chinese companies including Alibaba , JD.com and Baidu climbed between 8.2% and 9.9% in premarket trading after rumors and news reports fanned hopes for twin relief in US-China tension and China’s tough COVID rules. Starbucks Corp rose 4.3% after it topped Wall Street estimates for quarterly comparable sales and profit while DoorDash Inc’s revenue beat lifted the food delivery firm’s shares 11.8%.
PayPal Holdings Inc fell 6.4% after the online payments firm cut its annual revenue growth forecast in anticipation of a broader economic downturn.