U.S. stock futures experienced a decline on Friday morning as investors awaited critical economic data.
S&P 500 futures fell by approximately 0.28%, while Nasdaq 100 futures dropped 0.32%. Futures tied to the Dow Jones Industrial Average also saw a decrease, dropping by 79 points, or 0.18%.
This market movement occurred as Wall Street prepared for the release of December’s nonfarm payrolls report, which was issued at 8:30 a.m. ET on Friday. Economists polled by Dow Jones predicted an increase of 155,000 jobs, a slowdown compared to November’s gain of 227,000. The unemployment rate was expected to hold steady at 4.2%.
“If we saw a strong report, which we were anticipating, the market reaction might not have been positive, as it could have signaled that the Federal Reserve might have been less likely to cut interest rates that year,” said Brenda Vingiello, Chief Investment Officer at Sand Hill Global Advisors.
Market expectations showed that the Federal Reserve would likely refrain from reducing interest rates at its upcoming meeting later that month. The CME FedWatch Tool indicated a mere 7% chance of a quarter-point rate cut based on fed funds futures data.
Earlier that week, the Institute for Supply Management’s services index indicated a slowdown in growth within the U.S. services sector for December, alongside rising prices, which raised concerns about persistent inflation. Additionally, private-sector job growth for the previous month fell short of expectations, according to payroll service provider ADP.
As the week progressed, all three major U.S. stock indices were on track for losses. The S&P 500 was down 0.4%, the Nasdaq Composite had fallen 0.7%, and the Dow Jones was poised for a 0.2% decline. The New York Stock Exchange was closed on Thursday to observe a national day of mourning for the late former President Jimmy Carter.
Meanwhile, wildfires continued to rage in the Los Angeles area, including the Palisades Fire, which was described as “one of the most destructive natural disasters” in the city’s history. The ongoing devastation sent shares of Edison International plummeting more than 10% during Wednesday’s trading session.
Related topic:
