By Niket Nishant and Tharuniyaa Lakshmi
Sept 4 (Reuters) – Futures tracking the tech-heavy Nasdaq 100 and the benchmark S&P 500 indexes rose on Friday ahead of jobs data that could test the recent momentum in equities.
After a subdued start to September, equities recovered their poise in the prior session after Federal Reserve Governor Christopher Waller said he would support holding rates steady if data shows inflationary pressures are abating.
Traders scaled back expectations for a quarter-point rate hike in September, with markets now pricing in a 50% chance, down from 63% before Waller’s comments, according to the CME FedWatch tool.
“Waller’s comments matter for several reasons. This is the last major Fedspeak event before the September meeting blackout, leaving markets without further guidance until the decision,” said Felix Vezina-Poirier, chief strategist at BCA Research.
“Waller has also often been ahead of the curve in both hiking and cutting cycles, giving his guidance added weight.”
While Fed Chair Kevin Warsh’s focus on inflation has prompted some analysts to question if labor market trends could influence the central bank’s rate outlook, it is still expected to set the tone for the final session of the week.
Job growth is expected to have rebounded in August. Nonfarm payrolls likely increased by 56,000 jobs after declining by 23,000 in July, according to a Reuters survey of economists. Market participants tip the unemployment rate to hold at 4.1%, with a risk of 4.2%.
The last nonfarm payrolls print showed that the economy had unexpectedly shed jobs in July, and previously reported job gains for the prior two months were revised sharply lower.
Labor market momentum has cooled after a strong spring, partly due to higher energy costs following the Iran conflict and supply disruptions that weighed on hiring. Employment growth was also restrained by the impact of President Donald Trump’s broad tariff measures.
At 7:05 a.m. ET, Dow E-minis were down 58 points, or 0.11%, and S&P 500 E-minis were up 3.5 points, or 0.05%. Nasdaq 100 E-minis were up 130.25 points, or 0.44%.
Lululemon Athletica fell 20.1% in premarket trading after it slashed its full-year profit and revenue forecasts.
Adobe dropped 2.8% after it said longtime CEO Shantanu Narayen will hand over the reins to insider Anil Chakravarthy.
As investors head into the Labor Day weekend, debate about the seasonal weakness of September also persists.
Historically, September is the weakest month for stocks. But most of the weakness comes in the second half of the month, with returns averaging worse than 1%, according to Melissa Brown, global head of investment decision research at SimCorp.
Investors will also get the latest inflation readings when the Labor Department releases CPI and PPI data next week.
(Reporting by Niket Nishant, Tharuniyaa Lakshmi and Purvi Agarwal in Bengaluru; Editing by Maju Samuel)
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