Stock futures fell overnight on Thursday as investors awaited the September jobs report for more clues about the Federal Reserve’s tightening campaign.
Futures linked to the Dow Jones industrial average lost 12 points, or 0.04%, while futures on the S&P 500 fell 0.15%. Nasdaq 100-linked futures fell 0.29%.
Shares of Advanced Micro Devices fell in overnight trading after the chipmaker warned his third quarter income would be less than expected. Shares of Levi Strauss fell after a cut in guidance for him.
The major averages closed lower during regular trading but are on track to cap their best week since June 24 and finish around 4% higher. The Dow fell 346.93 points, or 1.15%, to 29,926.94, while the S&P 500 and Nasdaq Composite fell 1.02% and 0.68%, respectively.
All major S&P sectors ended the session in negative territory, with the exception of energy. The sector rose 1.8% as oil prices rose and is on track to close the week up 14.7%.
Thursday’s downdraft comes as investors remain skittish about the September jobs report, due for release on Friday. The findings could offer more certainty about the Fed’s tightening cycle, with a strong labor market or surprise to the upside indicating that the Fed may need a tougher stance to slow the economy and control rising prices. Economists surveyed by Dow Jones expect the data to show a 275,000 rise in nonfarm payrolls and unemployment to remain at 3.7%.
“The environment is ripe for a crisis and if the Fed keeps up its aggressive communication, I think something is very likely to break in the financial markets,” said Scott Minerd, global chief investment officer at Guggenheim in “Closing Bell: Overtime.” CNBC. ” Thursday.
Minerd said the pace of tightening is starting to create cracks in financial markets and could force a Fed pivot in the coming weeks.
“All the signs are there,” he said. “I can’t tell you exactly what will cause it, but the environment is ripe and when the Fed changes, they won’t announce it in advance, they won’t ring a bell.”
A surprise to the downside that occurs 75% of the time over the past 25 years in the September jobs report could prompt investors to stage a rally, he added.
Along with the big jobs report, wholesale inventories and consumer credit data will also be released on Friday. cannabis broth Brands Tillraywhich rose Thursday as the White House announced marijuana pardonswill report the earnings results.
