Futures trade cautiously as markets await jobs data

By Lisa Pauline Mattackal and Johann M Cherian

(Reuters) -U.S. stock index futures were little changed on Friday, as investors awaited a crucial employment report for confirmation of growing slackness in the U.S. labor market, which would give the Federal Reserve more leeway to cut interest rates this year.

The benchmark S&P 500 and the Nasdaq closed Thursday’s session slightly lower, dragged by falling technology stocks despite touching intraday record highs in early trading.

Some megacap technology stocks that took a hit in the previous session were also slightly higher premarket, but overall trading was subdued ahead of the May Nonfarm Payrolls data, expected later in the day.

Economists polled by Reuters estimate that the U.S. economy added 185,000 new jobs in May, with the unemployment rate expected to hold steady at 3.9%.

Markets have struggled to anticipate the Fed’s moves this year. Expectations for rate reductions as early as March dissipated quickly, as economic data indicated a tight labor market and persistent price pressures.

However, Thursday’s weekly jobless claims report was the latest in a string of data suggesting the labor market is easing, potentially giving policymakers more confidence that they can ease rates while avoiding resurgent inflation.

“As always, the payrolls are a bit of a lottery, but the last few days of labour market numbers confirm that we are on an easing labour market trajectory,” analysts at ING said in a note.

Traders now see a 68% chance of a September rate reduction, according to the CME’s FedWatch tool, and have priced in about two cuts this year, according to LSEG data..

Fresh inflation data is due next week, just before the Fed ends its two-day policy meeting on June 12. The central bank is expected to hold rates steady, but traders will await updated economic and policy forecasts for clues on the timing and pace of future cuts.

Artificial Intelligence darling Nvidia slipped 0.4%, on track to extending the previous session’s losses, with its valuation dipping below the $3 trillion mark, behind that of Apple, again making it the world’s third most-valuable company.

The chipmaker’s highly anticipated 10-for-1 share split is due after markets close, which could make the more-than-$1000 stock cheaper for investors.

At 7:14 a.m. ET, Dow e-minis were down 30 points, or 0.08%, S&P 500 e-minis were down 5.5 points, or 0.10%, and Nasdaq 100 e-minis were down 3.75 points, or 0.02%.

Among others, GameStop dropped 5.4% in choppy trading after announcing a potential stock offering and a drop in quarterly sales. The retailer’s shares had initially surged after stock influencer “Roaring Kitty” looked set to mark his return to YouTube at 12 p.m. ET on Friday.

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Other so-called meme stocks reversed gains, with AMC Entertainment and Koss Corp down 7.8% and 12.5%, respectively. Retail-focused trading platform Robinhood gained 0.8%.

Lyft shares rose 2.9% after markets closed on Thursday, following a forecast of 15% annual growth in its gross bookings through 2027.

(Reporting by Lisa Mattackal and Johann M Cherian in Bengaluru, Editing by Pooja Desai)