US Stocks To Open On A Tentative Note As Traders Remain Cautious Ahead Of Friday's Crucial Jobs Data

U.S. stock futures declined on Friday ahead of the crucial U.S. jobs data report after a mixed close in the previous session. Futures of all four major indices fell in premarket trade.

Traders were cautious on Friday morning as economists expect December's non-farm payrolls to soften as compared to November in Friday's official monthly jobs report. The unemployment rate is projected to hold steady at 4.2%.

The stock markets ended mixed on Wednesday followed by a break on Thursday in the remembrance of former President Jimmy Carter.

The 10-year and two-year Treasury notes yielded 4.70% and 4.29%, respectively. The probability of having no change in the interest rates for the upcoming Jan. 31, 2025, FOMC meeting was at 95.2%, according to CME Group’s FedWatch tool.

Futures	Change (+/-)
Nasdaq 100	-0.03%
S&P 500	-0.08%
Dow Jones	-0.01%
Russell 2000	-0.17%

In premarket trading on Friday, the SPDR S&P 500 ETF Trust SPY was down 0.03% to $589.31, and the Invesco QQQ Trust ETF QQQ was down 0.058% to $514.97, according to Benzinga Pro data.

Cues From The Last Session

U.S. stock markets closed mixed on Wednesday, with the Dow Jones Industrial Average gaining over 100 points. The Federal Reserve’s latest meeting minutes revealed uncertainty among policymakers regarding future interest rate cuts. The incoming administration’s policies and their potential impact on inflation remain unclear.

Acuity Brands Inc. AYI, a leading lighting solutions provider, reported weaker-than-expected revenue for the first quarter of its fiscal year.

On the economic data front, U.S. private companies added 122,000 jobs in December, lower than November’s figure and below market expectations. Initial jobless claims decreased to an 11-month low, suggesting a tightening labor market.

Most sectors in the S&P 500 Index closed higher, with consumer staples, healthcare, and materials sectors leading the gains. However, the energy and communication services sectors experienced declines.

The Dow Jones Industrial Average closed 0.25% higher at 42,635.20, up approximately 107 points. The S&P 500 Index rose 0.16% to 5,918.25, while the Nasdaq Composite dipped 0.055% to 19,478.88. Russell 200, on the other hand, fell 0.48% to 2,238.96.

Index	Performance (+/-)	Value
Nasdaq Composite	-0.055%	19,478.88
S&P 500	0.16%	5,918.25
Dow Jones	0.25%	42,635.20
Russell 2000	-0.48%	2,238.96

Insights From Analysts

TradingEconomics compiled economist consensus expects nonfarm payrolls to show a net gain of 154,000 jobs in December, down sharply from the 227,000 added in November. On the other hand, Bloomberg's consensus estimate stands at 165,000 jobs.

However, December's job report will be "the first clean monthly employment report after October," said Ed Yardeni and Eric Wallerstein in their weekly economic report, adding that October witnessed hurricanes and strikes, and November's jobs were boosted because of the returning workers.

Yardeni Research also anticipates further hiring under the Trump administration due to potential policy changes and increased economic certainty.

A weaker-than-expected jobs report on Friday could boost U.S. stocks, weaken the dollar, and lower government bond yields, as investors might see it as an indication that the Fed has room to ease monetary policy. –

Conversely, stronger-than-expected job growth or a lower unemployment rate could raise concerns about a robust labor market, potentially delaying the Fed’s timeline for easing.

“The recent string of strong economic data can keep pushing back the timing of the next Fed rate cut,” said Collin Martin, director, of fixed income strategy at the Schwab Center for Financial Research. “The Fed funds futures market is not pricing in the next cut until July, and if inflation remains as sticky as it has lately, it seems likely that the Fed could skip cutting rates at a number of meetings.”

Drawing a parallel between a strong U.S. dollar and equity performance, Louis Navellier of Navellier & Associates said that a stronger greenback “impedes the sales in the multi-international stocks” in the S&P 500 and most such stocks have at least half of their revenue coming from outside U.S.

“As a result, domestic stocks tend to prosper during a strong U.S. dollar environment, especially small-to-mid capitalization companies,” he added.

See Also: How to Trade Futures

Upcoming Economic Data

• On Friday, the U.S. employment report, unemployment rate, and hourly wages data for December along with hourly wages year over year will be released at 8:30 a.m., ET.

• The preliminary consumer sentiment data for January will be announced at 10:00 a.m., ET.

Stocks In Focus:

• Delta Air Lines Inc. DAL was up 3.37% in the premarket on Friday. Wall Street is expecting it to report quarterly earnings of $1.76 per share on revenue of $14.21 billion before the opening bell, according to data from Benzinga Pro.

• TD Synnex Corp. SNX was marginally up by 0.07% as analysts expect it to post quarterly earnings at $3.05 per share on revenue of $15.22 billion. The company will release earnings before the markets open.

• Constellation Brands Inc. STZ was marginally down by 0.50% as it will be reporting its earnings before the opening bell. Analysts project quarterly earnings of $3.31 per share on revenue of $2.53 billion.

• Walgreens Boots Alliance Inc. WBA was also up 0.33% ahead of its earnings before the opening bell. Analysts expect quarterly earnings of 37 cents per share on revenue of $37.28 billion.

• Costco Wholesale Corp. COST was up 2.44% after it posed a 9.9% jump in its core comparable sales excluding forex and gas price changes for the five weeks ended Jan. 5, 2025.

• Vision Marine Technologies Inc. VMAR was up 114.47% as it regained compliance with Nasdaq’s minimum stockholders’ equity requirement, which it previously failed to meet.

• IGM Biosciences Inc. IGMS was down 68.55% as it announced in a regulatory filing that it is reducing its workforce by 73% to preserve cash.

Commodities, Gold And Global Equity Markets:

Crude oil futures were higher in the early New York session by 2.52% to hover around $75.78 per barrel.

The gold spot index was up by 0.68% to $2,709.19 per ounce. The Dollar Index was at 109.184 level.

Asian markets closed lower on Friday as Hong Kong’s Hang Seng, Japan’s Nikkei 225, India’s S&P BSE Sensex, China’s CSI 300, Australia’s ASX 200, and South Korea’s Kospi index declined. European markets were mixed.

Read Next:

• California Wildfires Ignite Concerns For Insurance Stocks: Here Are Some Insurance ETFs Which Could Be Impacted

Photo courtesy: Wikimedia