U.S. stock futures inch higher ahead of jobs report

U.S. stock futures inched up on Friday ahead of the important jobs report that will assist investors in setting expectations about how much they believe the Federal Reserve will go in raising interest rates.

What’s going on?

The futures of the Dow Jones Industrial Average rose 15 points or 0.1 percent, to 31678.

Options on the S&P 500 rose 2.75 points (or 0.1 percent, up to 3972.

The futures market on Nasdaq 100 increased 7 points or 0.1 percent, to 12299.

On Thursday on Thursday, the Dow Jones Industrial Average rose by 146 points or 0.46 percent, to 31656 and the S&P 500 rose 12 points, or 0.3 percent at 3967, while the Nasdaq Composite fell 31 points (or 0.26 percent, to 11785.

What’s driving the markets?

On Friday, the focus will shift to what’s happening at the U.S. Labor Department, which will be releasing its data at 8:15 a.m. Eastern will release the latest data on nonfarm payrolls which is expected to show there was a growth in the U.S. economy added 318,000 jobs in August, keeping employment rates at 3.5 percent.

“All eyes today will be on the U.S. labor market report for August, which is likely to suggest that conditions remain too tight for the Fed’s comfort,” said Emily Nicol, an economist at Daiwa Capital Markets Europe.

Steve Englander, head of the global G10 FX analysis for Standard Chartered, said both the data on wages and jobs would need to drop significantly to change expectations for 75 basis points of increase in September. The bank is also anticipating 50 basis points of hike in November, when it was previously expecting not to change anything at all. “We had thought that the slowing of the economy would be enough to pause Fed hiking by November but [Fed Chair Jerome] Powell’s clear nod to restrictive policy points to a higher bar to a pause,” Powell advised clients in a letter.

The yield on the two-year Treasury which is especially dependent on expectations regarding Federal Reserve interest rates, was stable at 3.50 percent..

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