LDN - Business

Futures recover from Wall St selloff ahead of payrolls test

[April 05, 2024] (Reuters) - U.S. stock index futures rose on Friday, a day after equities slumped on hawkish remarks from Federal Reserve officials on interest rate cuts, while investors braced for a key jobs report that could help shape the monetary policy outlook.

Wall Street's main stock indexes fell more than 1% each on Thursday after some comments from Fed officials rattled the markets.

Minneapolis Fed Bank President Neel Kashkari said while he had penciled in two rate cuts for this year at the U.S. central bank's meeting last month, none may be required, if inflation continues to elude the Fed's target.

The CBOE Volatility index, also known as Wall Street's fear gauge, closed at its highest since November in the previous session and was last up 0.26 points at 16.62.

Money markets, however, are still pricing in about a 61% chance of at least a 25 basis point rate cut from the central bank in June, according to the CME FedWatch tool.

The nonfarm payrolls data for March, due at 8:30 a.m. ET, is expected to offer a clear indication of where the labor market is headed and firm investor bets' on rate cuts.

Economists polled by Reuters anticipate a rise of 200,000 jobs in the United States, compared with 275,000 in February, while the unemployment rate will likely remain steady at 3.9%.

"The narrative around the potential for interest rate cuts has been slightly contradictory this week, so there's a lot resting on this data to help steady the ship," Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown wrote in a note.

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A trader works on the trading floor at the New York Stock Exchange (NYSE) in New York City, U.S., April 4, 2024. REUTERS/Andrew Kelly/FILE PHOTO

"A looser labor market could help back the argument that the economy is returning to more stable footing."

Investors are also closely monitoring the developments and mounting tensions in the Middle East, with oil prices extending their gains amid supply disruption concerns. [O/R]

A slew of mixed economic data during the week, such as the soft services activity report, the stronger manufacturing report and comments from policymakers have pressured equities, with all three indexes heading for weekly losses.

Most megacap growth stocks edged up in premarket trading, with Tesla, Nvidia and Amazon.com up between 0.5% and 0.7%.

At 05:41 a.m., S&P 500 E-minis were up 14 points, or 0.27%, Nasdaq 100 E-minis were up 56 points, or 0.31%, Dow E-minis were up 61 points, or 0.16%

Among early movers, Krispy Kreme gained 4.4% in premarket trading after Piper Sandler upgraded the doughnut chain to 'overweight' from 'neutral.'

Advanced Micro Devices rose 1.6%, rebounding from an over 8% fall on Thursday.

(Reporting by Shristi Achar A in Bengaluru; Editing by Shinjini Ganguli)

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