(Reuters) -U.S. stock index futures slipped on Friday following a sharp overnight rally on Wall Street, as investors braced for a crucial labor market report that could determine the path of interest rates.
The benchmark S&P 500 index closed at a record high on Thursday after Fed Chair Jerome Powell said the central bank was “not far” from gaining the confidence that inflation is falling sufficiently to begin cutting interest rates.
Investors now await the closely watched U.S. jobs report at 8:30 a.m. ET that is likely to show job growth slowed in February after two straight months of robust gains.
Nonfarm payrolls likely increased by 200,000 jobs last month after surging 353,000 in January, according to a Reuters survey of economists.
The unemployment rate is expected to remain unchanged at 3.7% for the fourth consecutive month, while wage growth is anticipated to have slowed to 0.3% on a monthly basis.
“If the data is sufficiently soft – or ideally softer than expected, the Fed doves will finish the week on a dominant note. But if we see another month of blowout jobs report, confusion will reign,” said Ipek Ozkardeskaya, a senior market analyst at Swissquote Bank.
However, if next week’s consumer prices data is soft, investors may still cling on to rate cut hopes, Ozkardeskaya added.
Signs of persistent strength in the labor market could make it difficult for the Fed to start cutting interest rates in June as currently envisaged by investors.
At 6:58 a.m. ET, Dow e-minis were down 82 points, or 0.21%, S&P 500 e-minis were down 2.25 points, or 0.04%, and Nasdaq 100 e-minis were down 26 points, or 0.14%.
AI darling Nvidia (NASDAQ:NVDA) gained 2.8% in premarket trading, outperforming megacap growth and technology peers.
Chip stocks such as Micron Technology (NASDAQ:MU) and Intel (NASDAQ:INTC) rose more than 1% each.
Broadcom (NASDAQ:AVGO) slid 1.6% after the tech company’s full-year forecast failed to impress investors.
Shares of Marvell (NASDAQ:MRVL) Technology shed 5.4% after it forecast first-quarter results below market expectations on soft demand in its wireless infrastructure, consumer and enterprise markets.
Gap climbed 6.5% after the retailer beat Wall Street expectations for fourth-quarter results, buoyed by strong demand on improved product offerings at its Old Navy and namesake brands during the holiday season, and lower markdowns.
Costco Wholesale (NASDAQ:COST) shed 4.6% as quarterly sales fell short of estimates due to tepid demand for higher-margin goods.
Source: Economy - investing.com
