Stocks today: Stocks fall ahead of key August jobs report

Check back for updates throughout the trading day

U.S. stock futures fell sharply in early trading on Friday as investors looked to a crucial August jobs report that will clarify the Federal Reserve’s rate path and provide a litmus test for fears that economic growth slows down in the autumn months.

Stocks ended lower on Thursday, with the S&P 500 extending its September decline to 2.57%, following a mixed set of data that fueled confusion over the state of the labor market.

A weak August reading in the ISM’s benchmark survey of activity in the services sector, the key driver of US growth, also sowed concerns that growth is collapsing under the weight of high Fed interest rates in a late-cycle economy.

That puts the focus on today’s Wall Street jobs report, which seeks to determine the size of the Fed’s next rate cut, which would be the first in more than a year, and the pace and extent of further cuts heading towards the final. two meetings of the year.

CME Group’s FedWatch currently suggests a 41% chance of a half-point cut on September 18, but those odds could change quickly if today’s payrolls report shows any deviation from the Street’s current forecast.

Fed Chairman Jerome Powell will likely use today’s August jobs report to set the central bank’s fall rate path.

Olivier Douliery/Bloomberg via Getty Images

Analysts expect employers to have added 164,000 new jobs to the economy last month, up from July’s number of 114,000, with the overall unemployment rate falling to 4.2 percent.

“The labor market continues to show signs of softening across the board, but it remains unlikely to break down completely,” said Dr. Selma Hepp, chief economist at CoreLogic. “The real question remains whether or not the Federal Reserve waited too long to start cutting rates in an effort to avoid recession, and whether a soft landing is actually achievable.”

Bond markets have voiced just that concern for much of the week, with yields on rate-sensitive 2-year notes falling to 3.717%, down more than 20 basis points on the month.

At the same time, growth-focused 10-year notes fell 23 basis points to 3.699% as investors move cash into safe-haven assets.

Related: Jobs report to signal timing and size of fall Fed rate cuts

Heading into the start of Wall Street’s trading day with jobs data due at 8:30 a.m. ET, S&P 500 futures suggest a 37-point retreat at the opening bell.

Meanwhile, the Dow Jones Industrial Average is named 140 points lower, while the technology-focused Nasdaq is slated for a 2,325-point drop amid another decline in heavyweight chip stocks linked to new controls at export supported by the Biden Administration.

More Wall Street analysts:

• Analysts reset price target on Grand Theft Auto maker’s stock
• Stock market analyst American Express signals the change in consumer behavior
• Analyst resets Nvidia stock price target ahead of earnings

In Europe, the regional benchmark Stoxx 600 fell 0.43 percent in early Frankfurt trade after a downward revision to second-quarter euro zone GDP, while Britain’s FTSE 100 fell 0, 37%.

Overnight in Asia, the Nikkei 225 index fell 0.72% in Tokyo following the decline on Wall Street last night, while MSCI’s benchmark ex-Japan index across the region rose 0.22% at the end of the transaction.

Related: Veteran fund manager sees world of pain coming for stocks