U.S. stock index futures edged lower on Friday as investors await the monthly jobs report for November, which would provide more clues on the Federal Reserve’s path of monetary tightening.
The Labor Department’s jobs report due at 8:30 a.m. ET is expected to show nonfarm payrolls rose by 200,000 in November, less than the increase in October, while the U.S. unemployment rate is likely to remain at 3.7% in the last month.
Job growth for the last month was likely the smallest in nearly two years as mounting worries of a recession cooled demand for labor, which could give the Fed confidence to start slowing the pace of its interest rate hikes this month.
Wall Street indexes closed mixed on Thursday following a sharp rally the day before sparked by Fed Chair Jerome Powell’s comments on scaling back interest rates hikes as early as December.
Thursday’s moves followed a mixed bag of economic data, including the personal consumption expenditure index, the Fed’s preferred inflation metric, which was better than expected, while manufacturing activity shrank in November for the first time in 2-1/2 years.
Investors now see a 91% chance that the U.S. central bank will increase interest rates by 50 basis points in December, with the rates peaking under 5% in May 2023.
“The market is looking for the Goldilocks scenario for U.S. jobs numbers on Friday,” said Russ Mould, investment director at AJ Bell.
“Ideally the labor market would neither be so hot that it suggests the Fed needs to stay aggressive on rates nor so cold that it implies the world’s largest economy is headed for a severe downturn.”
Semiconductor company Marvell Technology Inc tumbled 6.9% in premarket trading after quarterly earnings and revenue missed expectations.
Automation software firm UiPath Inc jumped 10.2% on upbeat quarterly earnings.
At 05:42 a.m. ET, Dow e-minis were down 23 points, or 0.07%, S&P 500 e-minis were down 1 point, or 0.02%, and Nasdaq 100 e-minis were down 8.25 points, or 0.07%.
Benchmark 10-year Treasury yields fell to 10-week lows and the two-year note, which often indicates interest rate expectations, slipped to early October lows.