Futures drop on caution ahead of key payrolls data

New York: U.S. stock index futures took a dip on Friday as everyone’s waiting for a big labor market report. There’s a lot of chatter about inflation and what the new Trump administration might do, which has folks a bit on edge about the Federal Reserve’s next moves.

As of 5:31 a.m. ET, the Dow E-minis were down 48 points, which is about 0.11%. The S&P 500 E-minis dropped 15.75 points, or 0.26%, and the Nasdaq 100 E-minis fell by 70.5 points, or 0.33%. It’s not looking great.

Investors are also feeling jittery about rising Treasury yields, especially with the 10-year benchmark hitting near eight-month highs at 4.69%. That’s definitely adding to the nervousness.

Everyone’s eyes are glued to the Labor Department’s non-farm payrolls report coming out at 8:30 a.m. ET. Earlier job data this week has been a bit mixed, leaving people unsure about the job market’s health.

Today’s report is expected to show that the economy added around 160,000 jobs in December, with unemployment holding steady at 4.2%. Fingers crossed for some good news!

Later, investors will also check out the University of Michigan’s preliminary report on consumer sentiment for January. It’s all about getting a read on how people are feeling.

Wall Street’s main indexes are set to close out their second week in the red, with the S&P 500 down nearly 3% from its record high just a month ago. Not the best start to the year.

Fresh worries about inflation are stealing the spotlight, making the Fed cautious about easing monetary policy. They’re also keeping an eye on potential changes in trade and immigration under President-elect Trump, who’s set to take office in just 10 days.

There are reports about his plans, including possibly declaring a national economic emergency to speed up tariff implementation. That’s got investors a bit anxious about how it might affect the economy and global trade.

The Russell 2000 index, which tracks small-cap companies, has dropped over 8% from its record high in late November. Futures for that index dipped 0.4% on Friday, adding to the worries.

On Thursday, some Federal Open Market Committee members, including Boston Fed President Susan Collins, stressed the need for a careful approach to lowering borrowing costs this year. They’re being cautious.

Traders are betting that the central bank will keep interest rates steady for most of the first half of 2025, according to the CME Group’s FedWatch Tool. It’s all about playing it safe.

In premarket trading, chip stocks like Nvidia fell by 1.1%, and Advanced Micro Devices dropped 2.2% after news that the U.S. might announce new export regulations soon. That’s a bummer for them.

On a brighter note, U.S.-listed shares of TSMC rose by 1.3% after the world’s largest contract chipmaker reported better-than-expected fourth-quarter revenue, thanks to demand for artificial intelligence.

We’ve got quarterly reports from Walgreens Boots Alliance, Constellation Brands, and Delta Air Lines coming up before the markets open. It’s going to be a busy day!

Next week, earnings reports will ramp up, and everyone’s eager to see how the new government’s policies might impact companies and what that means for consumers and the U.S. economy.