Key facts
- US stock index futures advanced on Friday as Treasury yields declined and oil prices eased.
- Investors are awaiting the September nonfarm payrolls report, with expectations of slower job growth.
- Traders are pricing in a 76% probability that the Federal Reserve will maintain current interest rates in October.
- Nike shares dropped significantly after the company issued a weak annual revenue forecast and announced job cuts.
- Moderna will replace Warner Bros. Discovery in the Nasdaq-100 index effective October 9.
US stock index futures advanced on Friday as Treasury yields declined and oil prices eased, with investors awaiting a key jobs report. Traders are pricing in a 76% probability that the Federal Reserve will maintain current interest rates in October.
Brent crude prices slipped below $100-a-barrel following a report that the European Union discussed potential additional diesel and crude stock releases. Despite this, there were no new updates on the resolution of the Middle East conflict.
Technology stocks led the gains, with Nvidia, Broadcom, Advanced Micro Devices, Alphabet, and Tesla all seeing increases. However, Nike shares fell 10% after the sportswear company forecast a surprise steep drop in annual revenue due to weakness in China, announced job cuts, and decided to restructure its global business divisions.
Investor focus is now shifting to the nonfarm payrolls data for September, due at 8:30 a.m. ET. Economists anticipate US job growth to slow down, with the unemployment rate expected to hold steady at 4.1% for a third consecutive month. This data, along with earlier indicators of robust economic activity and slower-than-expected price increases, is influencing expectations for the Federal Reserve.
At 04:59 a.m. ET, Dow E-minis were up 259 points, or 0.51%, S&P 500 E-minis were up 38.75 points, or 0.5%, and Nasdaq 100 E-minis were up 256 points, or 0.83%. The yield on the 2-year Treasury note, which is sensitive to rate expectations, hovered near a more than one-week low touched on Thursday.
Despite the day's advances, Wall Street's main indexes were likely to end the week lower, with the S&P 500 set for a 1% drop, largely due to Treasury yields hitting over two-decade highs earlier in the week. Friday's economic calendar also includes August data on factory orders and comments from Dallas Fed President Lorie Logan.
In other equity movements, Moderna gained 2.3% after Nasdaq announced the vaccine maker will replace Warner Bros. Discovery in the Nasdaq-100 index from October 9. Reflecting a broader risk-on sentiment, bitcoin gained 2%, while Coinbase and Strategy rose nearly 3% each.