U.S. stock index futures signaled a muted start on Thursday, with traders showing little inclination to push markets strongly in either direction after Wednesday’s rebound.
Much of the hesitation stems from anticipation of Friday’s monthly employment data from the Labor Department. Economists expect the report to show payrolls grew by 75,000 in August, following July’s increase of 73,000. The figures are likely to influence expectations for monetary policy.
Currently, markets see a near certainty that the Federal Reserve will cut interest rates by a quarter point later this month. CME Group’s FedWatch Tool places the probability of such a move at 97.6%.
Fresh labor market readings on Thursday added to the uncertainty. Payroll processor ADP reported private-sector job growth of 54,000 in August, falling short of the consensus forecast of 65,000 and well below July’s upwardly revised gain of 106,000. Meanwhile, the Labor Department said initial jobless claims rose more than expected for the week ending August 30.
Stocks ended Wednesday mostly higher despite some intraday swings. The Nasdaq surged 218.10 points, or 1.0%, to close at 21,497.73, while the S&P 500 advanced 32.72 points, or 0.5%, to 6,448.26. The Dow Jones Industrial Average edged lower, slipping 24.58 points, or 0.1%, to 45,271.23.
Tech stocks led the charge, particularly Alphabet (NASDAQ:GOOG), which soared 9.1% after a favorable ruling in a major antitrust case. U.S. District Judge Amit Mehta determined the company would not be forced to sell its Chrome browser or the Android operating system, calling plaintiffs’ divestiture demands excessive. Apple (NASDAQ:AAPL) also gained 3.8%, benefiting from the decision that allows Google Search to remain preloaded on iPhones.
Additional support for equities came from a Labor Department report showing U.S. job openings in July fell to their lowest level in ten months. The softer labor market backdrop has further fueled expectations of an imminent Fed rate cut.
Sector performance, however, was mixed. Gold producers rallied as the NYSE Arca Gold Bugs Index rose 1.8%, with bullion hitting another record high. By contrast, energy shares slumped, dragged down by falling crude prices, with the Philadelphia Oil Service Index sliding 2.7% and the NYSE Arca Oil Index dropping 2.6%.
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