Stock futures slipped in overnight trading Thursday as investors looked ahead to September’s jobs report for further clues into the Federal Reserve’s tightening campaign.
Futures tied to the Dow Jones Industrial Average shed 12 points, or 0.04%, while S&P 500 futures dipped 0.15%. Futures tied to the Nasdaq 100 slipped 0.29%.
Advanced Micro Devices’ stock fell in overnight trading after the chipmaker warned its third-quarter revenue would be lower than anticipated. Levi Strauss shares slipped following a cut to its guidance.
Major averages closed lower during regular trading but are on pace to cap their best week since June 24 and 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 shed 1.02% and 0.68%, respectively.
All major S&P sectors finished the session in negative territory, with the exception of energy. The sector rose 1.8% as oil prices gained and is on pace to close out the week 14.7% higher.
Thursday’s downdraft comes as investors remain on edge ahead of September’s jobs report slated for release Friday. The findings could offer further certainty into the Fed’s tightening cycle, with a strong jobs market or upside surprise signaling that the Fed may need a tougher stance to slow the economy and tame surging prices. Economists surveyed by Dow Jones expect the data to show a 275,000 increase in nonfarm payrolls and unemployment to hover at 3.7%.
“The environment is ripe for a crisis and if the Fed keeps its hawkish communication up I think we’re quite likely to have something 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 beginning to create cracks in the 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 pivots, they’re not going to preannounce it, they’re not going to ring a bell.”
A surprise to the downside occurring 75% of the time over the last 25 years in the September jobs report could lead investors to stage a rally, he added.
Along with the big jobs report, wholesale inventories and consumer credit data are also due out Friday. Cannabis stock Tilray Brands, which rose Thursday as the White House announced marijuana pardons, will report earnings results.