Traders on the NYSE floor, June 1, 2022.
Source: New York SE
Stock futures rose Thursday night as investors turn their attention to more jobs data expected Friday morning.
Futures linked to the Dow Jones Industrial Average rose about 78 points. S&P 500 futures and Nasdaq 100 futures were both up 0.3%.
In regular trading on Thursday, all three major indices broke two-day losing streaks, putting them on a solid week. The Dow rose 435.05 points, or 1.3%. The S&P 500 rose 1.8% and the Nasdaq Composite rose 2.7%.
Thursday’s gains pushed the key moving averages for this week into the green. The S&P 500 is up 0.5%, heading for a second straight week of gains.
Trade was choppy at the start of Thursday’s trading as investors were divided on the recession outlook and whether the Federal Reserve might take a pause from rate hikes. Fed Vice Chair Lael Brainard told CNBC on Thursday that it was unlikely to happen anytime soon and that there was “much work to be done to bring inflation down to our 2% target.”
Investors also digested jobs data released by ADP this morning, which showed the slowest pace of job creation during the pandemic recovery.
But shares rallied into the close, closing near session highs as investors saw value in technology stocks and other battered names in this year’s pullback. Traders await Friday’s nonfarm payrolls report. Although the pace of job growth is expected to have slowed for the month of May, economists say the job market remains strong even as parts of the economy have weakened.
“Today’s data also sharpens focus on Friday’s May payrolls release – specifically wage growth,” wrote Goldman’s Chris Hussey. “A very strong reading could suggest the Fed has much more work to do to contain inflationary pressures in the economy, while a big downside surprise – like the one we saw at ADP today – could lend support to those who believe that the US will quickly slide into a recession.”
According to a survey by Dow Jones, economists assume that 328,000 jobs were created in May, 100,000 fewer than in April. Consensus estimates call for a 0.4% rise in wages, a faster pace than April’s 0.3% rise.
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Elsewhere, traders also scrutinized a warning from Microsoft when the company lowered its fourth-quarter guidance, blaming unfavorable exchange rates. Microsoft fell early in the session before ending slightly in the green on Thursday.
No major earnings reports are scheduled for Friday. In addition to non-farm payrolls, traders will also be watching the new purchasing managers’ index data from Markit and ISM, due out in the morning.