Futures fall as investors brace for payrolls data By Reuters

(Reuters) – U.S. stock index futures fell on Friday ahead of key jobs data that could be key when the Federal Reserve decides on the size of an interest rate cut expected later this month.

The August nonfarm payrolls figure, due at 8:30 a.m. ET is the final key labor market data before the US central bank’s meeting in September and is expected to show an increase of 160,000 jobs, up from 114,000 in July. The unemployment rate is expected to fall to 4.2% in August from 4.3% the previous month.

“The key question is, of course, how the Fed will react after the current labor market data… a cut of 50 bps could be seen as a tacit admission that the Fed is behind the curve,” Teeuwe Mevissen , senior macro strategist at Rabobank, said.

The labor market was under scrutiny after an unexpected rise in the unemployment rate stoked recession fears and sent the tech-heavy Nasdaq down more than 10 percent into correction territory and global markets into a sell-off in almost a month ago.

Traders’ bets for a 25-basis-point rate cut in September are now at 57%, according to CME Group’s (NASDAQ: ) FedWatch tool, while those for a 50-basis-point cut have risen to 43% from 30% per week. ago.

Markets will also look to remarks from New York Fed President John Williams and Fed Governor Christopher Waller for their insights into the data and the central bank’s policy accordingly.

At 5:21 a.m. ET, the Dow E-minis were down 161 points, or 0.39%, the E-minis were down 38.5 points, or 0.70%, and the E-minis were down 233, 5 points or 1.23%.

The S&P 500 and blue-chip Dow hit more than three-week lows on Thursday after a mixed set of economic data fueled uncertainty about the pace of monetary policy easing.

September was historically weak for U.S. stocks, with the benchmark S&P 500 down about 1.2% for its average month since 1928.

The S&P 500 is on track for a weekly decline of more than 2 percent, its biggest decline in nearly five months, led by a nearly 5 percent decline in technology stocks.

Broadcom (NASDAQ: ) fell 9.6% after the chipmaker reported fourth-quarter revenue slightly below estimates, hurt by sluggish spending in its broadband segment.

Other chip stocks such as Nvidia (NASDAQ: ) and Marvell (NASDAQ: ) Technology fell 2.2% each, while Advanced Micro Devices (NASDAQ: ) fell 1.2%. It is expected to be the biggest weekly drop in more than a month.

Mobileye Global (NASDAQ: ) fell 4.9% after a report that major shareholder Intel (NASDAQ: ) is exploring a sale of part of its stake in the auto technology firm.

US Steel rose 3%. A letter showed that Japan’s Nippon Steel is trying to address the US government’s concerns about its proposed acquisition of US Steel.

Samsara gained 5.2% after the software firm raised its annual revenue forecast.