U.S. stock futures fell on Friday as investors braced for a crucial jobs report that will provide clues about the size of an expected interest rate cut this month and the resilience of the U.S. economy.
Technology stocks led the declines: Nasdaq 100 futures (NQ=F) fell 1.1%, S&P 500 futures (ES=F) fell 0.6% and Dow Jones Industrial Average futures (YM=F) fell 0.3%.
Despite the anemic closings, stocks have seesawed this week as the market assessed new economic data for its potential to persuade the Federal Reserve to cut rates by more than 0.25% at its September meeting. Weaker labor market readings have fueled debate over the possibility of a 0.5% cut, but have also raised concerns that the U.S. is on the brink of a recession.
Read more: Fed Predictions for 2024: What Experts Say About the Possibility of a Rate Cut
Investors are now bracing for more volatility as they await the crucial August jobs report, which is expected to show nonfarm payrolls rising to 165,000 when it is released at 8:30 a.m. ET. The key question is whether the data confirms the cooling trajectory shown by the surprise July print or reveals that labor market weakness is overdone.
Ahead of the report, the market sees a 41% chance of a deeper rate cut by the Fed, up from 30% a week ago, according to the CME FedWatch tool.
Meanwhile, shares of chipmaker Broadcom (AVGO) fell in premarket trading following a lackluster sales forecast. While the Apple supplier is benefiting from a surge in spending on artificial intelligence, its other divisions are not keeping up.