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Futures subdued as caution prevails ahead of jobs data
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Futures subdued as caution prevails ahead of jobs data
Sep 6, 2024 12:52 PM

(Reuters) - U.S. stock index futures were flat to marginally lower ahead of a series of economic data on Thursday as investors scoured for clues to determine the size of the Federal Reserve's interest rate cut that is expected later this month.

The S&P 500 and the tech-heavy Nasdaq closed lower for the second straight session on Wednesday after a drop in job openings in July and a Fed survey fanned worries of slowing economic activity.

Traders' bets for a 25-basis point reduction in interest rates at the U.S. central bank's meeting later in September stand at 59%, according to the CME Group's FedWatch Tool. Bets for a larger 50-bps cut rose to 41% from 34% a week earlier.

September has been historically weak for U.S. equities, with the benchmark index down about 1.2% for the month on average since 1928.

Worries that a cooling labor market could mean a looming recession have added to the sense of caution, with the benchmark S&P 500 down more than 2% so far this week and tech stocks falling nearly 5%.

Late on Wednesday, San Francisco Fed President Mary Daly, a voting member this year, said the central bank needs to cut interest rates to keep the labor market healthy, but it is now down to incoming economic data to determine by how much.

Focus will be on the ADP National Employment Report and weekly jobless claims, in the run-up to Friday's crucial non-farm payrolls data from the Labor Department.

Economists expect the ADP report, due at 8:30 a.m. ET, to show private payrolls rose by 145,000 jobs in August, compared with an increase of 122,000 in July.

The Institute of Supply Management survey, due at 10 a.m. ET, is expected to show non-manufacturing activity in August stood at 51.1.

At 05:32 a.m. ET, Dow E-minis were up 24 points, or 0.06%, S&P 500 E-minis were down 1 point, or 0.02%, and Nasdaq 100 E-minis were down 39 points, or 0.21%.

Nvidia edged up in premarket trading, after falling more than 11% during the past two sessions. The AI chip firm said on Wednesday it did not receive a U.S. Justice Department subpoena.

Tesla rose 2.3% after the electric-vehicle maker said it will launch the full self-driving advanced driver assistance software in the first quarter next year in Europe and China, pending regulatory approval.

Other rate-sensitive growth stocks such as Meta, Alphabet and Apple were flat to marginally lower.

C3.ai tumbled 18.8% after the AI software firm missed quarterly subscription revenue estimates as enterprises tightened spending amid economic uncertainties.

Leading up to the U.S. presidential elections, Goldman Sachs analysts said Democratic presidential candidate Kamala Harris' proposed corporate tax hike could lower earnings for companies on the S&P 500 index by about 5%, while Republican candidate Donald Trump's proposed relief would boost earnings by about 4%.

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