Market Overview
U.S. stock futures pointed to a modestly higher open on Friday as market participants turned their attention to the release of September's employment data. S&P 500 futures gained 0.26%, Dow Jones Industrial Average futures added 125 points (0.24%), and Nasdaq-100 futures rose 0.42%. In the prior session, the Dow and the Nasdaq Composite finished slightly higher, while the S&P 500 advanced 0.2% to start October. All three major indexes were on track for weekly declines, with the Dow down 1.7% for the period.[S1]
Asia-Pacific equities mostly fell on Friday. Japan's Nikkei 225 dropped 0.95% after a sharp gain on Thursday, South Korea's Kospi lost 1%, and Hong Kong's Hang Seng Index slid 2.48% as trading resumed following a holiday. Australia's S&P/ASX 200 bucked the trend with a 0.35% rise.[S1]
Bond Yields and Oil Prices
Government bond yields first spiked to levels not seen in years, then eased back. The 10-year Treasury note's yield hit 5.344%, a peak last recorded in 2002, and the 30-year bond's yield matched its 24-year high. Crude prices also moved up following a Wall Street Journal report that a third U.S. aircraft carrier strike group is being sent to the Middle East. Brent futures settled 4%-plus higher at $102.31 a barrel, while West Texas Intermediate rose 2.7% to $92.87.[S1]
Jobs Report and Fed Expectations
September's nonfarm payrolls report, due Friday, is expected to show job growth of 84,000 and an unemployment rate holding at 4.1%, according to the Dow Jones consensus. The data arrives as traders reassess the Federal Reserve's next move. Fed funds futures trading indicates a 72% probability that the central bank will keep rates unchanged in October. Christopher Hodge, chief U.S. economist at Natixis CIB Americas, said a strong jobs report alone would likely not prompt a Fed hike in October given the current narrative of a stable labor market. He expects payrolls to increase by 60,000, which would bring the three-month moving average to 81,000, and anticipates growth in manufacturing and construction amid a data center buildout.[S1]
