(Reuters) – Futures linked to Wall Street’s main indexes were largely flat on Friday, with investors cautious ahead of a monthly jobs report expected to be key in assessing the Federal Reserve’s interest-rate trajectory.
U.S. job growth likely surged in November after being severely constrained by hurricanes and strikes, but this would probably not signal a material shift in easing labor market conditions, which the Fed will need to cut interest rates again this month.
“Recent Fed speakers have taken pains to leave all options open in December and the decision remains too close to call,” said Max McKechnie, global market strategist at J.P.Morgan Asset Management.
“However, if we do get strong payrolls data today, revisions to the Fed’s anticipated path for interest rates next year are all but guaranteed.”
Data at 8:30 a.m. is expected to show nonfarm payrolls likely increased by 200,000 jobs last month, while the unemployment rate is expected to climb to 4.2%, according to a Reuters survey of economists.
At the moment, traders see a near 67% chance of the Fed cutting interest rates by 25 basis points when it meets later this month, according to CME’s FedWatch Tool.
A preliminary reading of December U.S. consumer sentiment calculated by the University of Michigan will also be released shortly after markets open on Friday.
Four Fed officials are scheduled to make public appearances throughout the day, just before a media blackout for the Fed’s Dec. 17-18 policy meeting kicks in on Saturday.
U.S. stocks closed lower in the last session, with UnitedHealth down sharply and technology shares giving up some gains after a steady increase through the week.
Despite Thursday’s pullback, the S&P 500 and the Nasdaq were set for their third consecutive weekly gains, while the blue-chip Dow was set for minor losses.
The three indexes are hovering near record highs as a relentless rally in heavyweight tech stocks – a bid to cash in on the artificial intelligence hype – has led to robust gains throughout this year.
U.S. President-elect Donald Trump’s win in the Nov. 5 election has been another recent tailwind for stocks. Analysts expect his policies on tax cuts and looser regulations could support corporate performance.
At 05:00 a.m. ET, Dow E-minis were down 15 points, or 0.03%, S&P 500 E-minis were down 3.5 points, or 0.06%, and Nasdaq 100 E-minis were down 1.5 points, or 0.01%.
Among early premarket movers, Ulta Beauty advanced 11.4% after the cosmetics retailer raised its annual profit forecast, signaling a revival in demand for perfumes and makeup during the holiday shopping season.
