U.S. Futures Mixed; Treasury Yields and Payrolls in Focus

By Peter Nurse   

Investing.com - U.S. stocks are seen opening mixed Friday, in cautious trading after the previous session’s sharp sell-off, ahead of the closely watched monthly employment report.

At 7:30 AM ET (1230 GMT), the Dow Futures contract was up 30 points, or 0.1%, S&P 500 Futures traded 42points, or 0.1%, higher, while Nasdaq 100 Futures dropped 20 points, or 0.2%.

Wall Street closed sharply lower Thursday, with the tech-heavy Nasdaq Composite falling 2.1%, erasing its gains for the year and dropping into correction territory from its February high. The Dow Jones Industrial Average dropped 1.3%, now over 3% below its record high, and the S&P 500 fell 1.3%. 

Stocks could rebound Friday, but any gains look tepid as U.S. Treasury yields remain elevated. Federal Reserve chair Jerome Powell shrugged off investor fears about rising inflation, stating on Thursday that the central bank’s ultra-loose monetary policy was here to stay given the uneven economic recovery.

“It seems clear that upside risks to U.S. yields will dominate into the Fed meeting of March 17, leaving both risk assets and short dollar positions vulnerable,” said analysts at ING, in a research note.

The latest barometer of the state of the recovering economy will come with the release of the government’s tally of new non-farm jobs in February, due at 8:30 AM ET (1330 GMT). Expectations are for a reading of 182,000, up from the 49,000 reported for January. 

“Powell made it very clear that the U.S. has a long way to go to meet its full employment goals – meaning in reality a strong jobs report should not bring pricing of the first Fed hike substantially nearer than the currently-priced 1Q ‘23,” added ING.

In the corporate sector, the big tech names will again be in focus as investors think twice about owning richly-valued companies like Tesla (NASDAQ:TSLA), which is now 30% lower than its record high earlier this year.

Also in the spotlight will be the oil majors, on the back of sharp gains in the price of crude after the decision of the Organization of the Petroleum Exporting Countries and allies, a grouping known as OPEC+, not to increase output in April. 

Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX) were both up around 2% premarket, while U.S. crude futures traded 2.5% higher at $65.42 a barrel and the international benchmark Brent contract rose 2.7% to $68.53, its highest since 2019. Both contracts surged more than 4% on Thursday,  

Elsewhere, gold futures fell 0.4% to $1,693.75/oz, while EUR/USD traded 0.2% lower at 1.1937.

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