U.S. stock futures fell on Friday as investors digested a key jobs report that provided clues about the size of this month’s expected rate cut and the resilience of the U.S. economy.
Tech stocks led the declines, with Nasdaq 100 futures (NQ=F) falling 0.5%. S&P 500 futures (ES=F) fell 0.2%, while Dow Jones Industrial Average futures (YM=F) fell 0.1%. All three indexes had already seen more notable declines ahead of the report, however.
The U.S. economy added 142,000 jobs in August, falling short of expectations for about 165,000 jobs. The previous month’s job growth was also revised down as the labor market showed signs of continued cooling. However, the unemployment rate fell back to 4.2%.
The report changed expectations that the Fed would deliver a bigger rate cut at its meeting in less than two weeks. According to the CME FedWatch tool, traders see a 50-50 chance of a 50 basis point cut, up significantly from Thursday.
Despite the bloodless closes, stocks have rallied this week as the market assesses incoming economic data to build expectations about the size of the Fed’s rate cut. All three indexes are poised for significant weekly declines.
Read more: Fed Forecasts for 2024: What Experts Say About the Possibility of a Rate Cut
Meanwhile, shares of chipmaker Broadcom (AVGO) fell in premarket trading on the company’s news, following a disappointing sales forecast. While the Apple supplier is benefiting from a surge in AI spending, its other divisions are falling short.
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