Stock futures fell slightly on Friday morning as investors looked to September’s jobs report for further clues to the Federal Reserve’s tightening campaign.
S&P 500 futures fell 0.17%, while futures linked to the Nasdaq 100 fell 0.30%. Dow Jones Industrial Average futures were little changed.
Advanced Micro Devices shares fell in overnight trading after the chipmaker warned that third-quarter revenue would be lower than expected. Levi Strauss shares fell after a cut in guidance.
Major averages closed lower in regular trading, but are about to cap their best week since June 24 to finish about 4% higher. The Dow fell 346.93 points, or 1.15%, to 29,926.94, while the S&P 500 and Nasdaq Composite fell 1.02% and 0.68%, respectively.
All major S&P sectors ended the session in negative territory, with the exception of energy. The sector rose 1.8% as oil prices rose and is on course to end the week 14.7% higher.
Thursday’s downdraft comes as investors remain on edge ahead of the September jobs report scheduled for release on Friday. The findings could provide further certainty into the Fed’s tightening cycle, with a strong labor market or a surprise on the upside signaling the Fed may need a tougher stance to slow the economy and tame rising prices. Economists polled by Dow Jones expected the data to show an increase of 275,000 in wages and unemployment at 3.7%.
“The environment is ripe for a crisis, and if the Fed keeps up its hawkish communication, I think there’s a high probability that something will break in the financial markets,” Scott Minerd, Guggenheim’s global chief investment officer, said on CNBC’s “Closing Bell: Overtime” on Thursday .
Minerd said the pace of tightening is starting to create cracks in financial markets and could force a Fed pivot in the coming weeks.
“All the signs are there,” he said. “I can’t tell you exactly what will cause it, but the environment is ripe and when the Fed swings, they’re not going to pre-announce it, they’re not going to ring a bell.”
A surprise to the downside, which has occurred 75% of the time over the past 25 years in the September jobs report, could cause investors to stage a rally, he added.
Along with the major jobs report, wholesale inventories and consumer credit data are also due on Friday. Cannabis stocks Tilray Brandswhich rose Thursday when the White House announced marijuana pardons, will report earnings results.