Dow Futures Dip, Jobs Report Coming — and What Else Is Happening in the Stock Market Today

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The floor of the New York Stock Exchange (Photo by Spencer Platt/Getty Images)

Stock futures edged lower Friday ahead of the U.S. jobs report for May, with investors hoping the data can allow the Federal Reserve to be less aggressive on its path of monetary tightening.

Contracts linked to the Dow Jones Industrial Average fell 19 points, or 0.06%, to 33,204, S&P 500 futures were down 0.2% and Nasdaq futures declined 0.5%. Stocks closed with sharp gains on Thursday, putting equities on track to close the week higher.

Economists surveyed by FactSet expect the U.S. to have added 322,500 jobs last month, down considerably from 428,000 in April, with the unemployment rate seen at 3.5% in May, down from 3.6%. Hourly average earnings were forecast to have risen 0.4% in May, compared with April’s increase of 0.3%.

Federal Reserve Chairman Jerome Powell has suggested a less frothy jobs market could help reduce historically high inflation. The labor market has continued to run hot, with job openings and workers quitting near the highest levels on record

Jeffrey Halley, senior market analyst at Oanda, said a strong U.S. jobs report “equals Fed tightening with lots of 0.5%” interest rate increases from the Federal Reserve, and investors selling equities. A low number equals less Fed tightening.

Wall Street has priced in half-percentage-point interest rate increases at the next two Fed meetings, in June and July. What’s less certain is what the central bank will do at its September meeting.

Federal Reserve Vice Chair Lael Brainard told CNBC on Thursday that “it’s very hard to see the case for a pause” when referring to a slowing or stopping of interest rate increases.

Meanwhile, oil prices traded lower Friday, paring gains from Thursday after OPEC+ agreed at a meeting Thursday to a bigger-than-expected boost in oil production.

Write to Joe Woelfel at joseph.woelfel@barrons.com

Write to Joe Woelfel at joseph.woelfel@barrons.com