U.S. stock futures fell on Friday as investors braced for a key jobs report that could provide clues about the size of the expected rate cut this month and the resilience of the U.S. economy.
Tech stocks fell, leading the declines, with Nasdaq 100 futures (NQ=F) down 1.1%. S&P 500 futures (ES=F) fell 0.6%, while Dow Jones Industrial Average futures (YM=F) fell 0.3%.
Despite the bloodless closes, stocks have been buckling this week as the market assesses incoming economic data for its potential to convince the Federal Reserve to cut rates by more than 0.25% at its September meeting. Softer labor market data has fueled debate over the likelihood of a 0.5% cut, but has also raised concerns that the U.S. is on the brink of a recession.
Read more: Fed Forecasts for 2024: What Experts Say About the Possibility of a Rate Cut
Investors are now bracing for more volatility as they await the crucial August jobs report, which is expected to show nonfarm payrolls rising to 165,000 when it’s released at 8:30 a.m. ET. The key question is whether the data confirms the path of cooling shown in July’s surprise print, or whether labor market weakness is being overstated.
According to the CME FedWatch tool, the market estimates the probability of a further rate cut by the Fed at 41% based on the report, compared to 30% a week ago.
Meanwhile, shares of chipmaker Broadcom (AVGO) fell in premarket trading on the heels of a lackluster sales forecast. While the Apple supplier is benefiting from a surge in AI spending, its other divisions are falling short.
