U.S. equity futures moved higher on Thursday as Treasury yields declined, with investors assessing fresh labor market data ahead of Friday’s monthly employment report.
The benchmark 10-year Treasury yield fell by more than 6 basis points after finishing Wednesday unchanged at its highest closing level in more than a year.
Yields extended their decline following the latest initial jobless claims figures from the Labor Department.
Jobless Claims Increase Slightly Above Forecast
Initial claims for U.S. unemployment benefits increased by 2,000 to 206,000 in the week ended August 29.
The previous week’s figure was revised to 204,000 from the initially reported 203,000, while economists had expected the latest reading to reach 205,000.
Attention now turns to Friday’s monthly employment report. Economists forecast an increase of 55,000 jobs in August following a decline of 23,000 in July. The unemployment rate is expected to increase to 4.2% from 4.1%.
The report will provide further labor market information ahead of the Federal Reserve’s monetary policy meeting later this month.
Daniela Hathorn, Senior Market Analyst at Capital.com, said: “Weaker labor-market figures could strengthen the argument for patience, while resilience in employment alongside sticky inflation would make the hawkish case increasingly difficult to dismiss,”
She added, “Investors have been remarkably resilient so far, but that resilience is likely to be tested if oil, yields and expectations for Fed tightening begin moving higher simultaneously.”
Major U.S. Indices Closed Higher Wednesday
Wall Street recovered on Wednesday following declines over the previous three sessions.
The Dow Jones Industrial Average rose 295.07 points, or 0.6%, to 53,061.95. The Nasdaq Composite gained 118.05 points, or 0.5%, to finish at 26,217.82, while the S&P 500 advanced 35.13 points, or 0.5%, to 7,666.60.
The gains followed a period in which the S&P 500 had fallen to its lowest level in almost a month.
Crude oil prices and Treasury yields initially declined during Wednesday’s trading before recovering from their earlier lows.
ADP Data Shows 38,000 Increase in Private Payrolls
ADP reported that private-sector employment increased by 38,000 jobs in August, below the 48,000 increase expected by economists.
July’s increase was revised to 46,000 jobs from the initially reported 44,000.
The August reading represented the slowest rate of private-sector job creation since January, when 11,000 positions were added.
Investors are assessing the employment figures alongside inflation data as they consider the potential path of Federal Reserve interest-rate policy.
Gold and Oil Service Shares Record Gains
Sector performance was mixed during Wednesday’s session.
The NYSE Arca Gold Bugs Index rose 2.9%, while the Philadelphia Oil Service Index gained 2.4%.
Telecommunications, airline and biotechnology stocks also moved higher, while software shares declined.
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