Dow futures turned negative in early trading Friday following September’s disappointing jobs report.
Futures contracts tied to the Dow Jones Industrial Average fell 32 points. S&P 500 futures were flat. Nasdaq 100 futures rose 0.2%. The 10-year Treasury yield was around 1.57%.
All eyes are on Friday’s jobs report, which will be key as the Federal Reserve prepares to slow its $120 billion-per-month bond-buying program. Economists are expecting the economy to have added 500,000 jobs in September, according to estimates from Dow Jones. In August, just 235,000 jobs were added, significantly below the consensus estimate of 720,000.
The Department of Labor said Thursday that jobless claims for the prior week totaled 326,000. That was lower than the 345,000 economists had been calling for. Continuing claims, meanwhile, declined by 97,000 to 2.71 million.
Stocks advanced during regular trading on Thursday as Washington reached a deal to raise the debt ceiling into December. The Dow gained about 340 points, or 0.98%, for its third straight positive session. The S&P 500 and Nasdaq Composite also advanced for a third day, gaining 0.83% and 1.05%, respectively. The three major averages are on track to finish the week in the green.
“The last appetizer to Friday’s nonfarm payroll report was a positive weekly jobless claims report,” said Edward Moya, senior market analyst at Oanda. “As the US continues to get the delta variant spread under control, the labor market recovery should continue to improve.”
Uncertainty around the debt ceiling had been a headwind for the market but other risks remain, including accelerating inflation and rising rates. The 10-year Treasury yield was around 1.57% on Thursday, and UBS sees it rising to 1.8% by the end of the year.
“A steadily improving US labor market and solid US economic growth should provide the Federal Reserve with the green light to start curbing its quantitative easing (QE) program,” the firm wrote in a note to clients.
Wall Street is also preparing for third-quarter earnings season, which kicks off next week.
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