Global stock futures showed little change early Friday as traders awaited the critical August jobs report. This follows a strong performance on Thursday for U.S. markets, boosted by Federal Reserve Governor Waller’s dovish comments on interest rates.
Meanwhile, European markets opened mixed with Volkswagen seeing gains, while global energy prices for gas and oil edged higher due to supply concerns and geopolitical tensions. Crypto and currencies also saw movements, with Bitcoin near $81,000 and the Japanese yen holding strong amid intervention speculation.
Stock futures saw minimal movement early Friday as investors keenly awaited the release of August's crucial payrolls report. Futures tied to the Dow Jones Industrial Average remained flat, while S&P 500 futures edged up 0.05% and Nasdaq-100 futures gained 0.17%.
This slight shift followed a strong showing in Thursday's regular trading, where the three major U.S. averages climbed significantly. The 30-stock Dow soared more than 600 points (1.2%), marking its best day since August 4. The S&P 500 also rose over 1%, and the Nasdaq Composite advanced 1.4%.
Asia-Pacific markets mirrored this positive sentiment, opening higher on Friday. South Korea’s Kospi jumped 1.13%, Japan’s Nikkei 225 added 0.74%, and Hong Kong’s Hang Seng Index gained 1.9%. Mainland China’s CSI 300 also rose 0.89%, while Australia’s S&P/ASX 200 was largely unchanged.
U.S. stocks received a boost from retreating Treasury yields after Federal Reserve Governor Christopher Waller indicated he would be 'inclined' to support maintaining current interest rates (3.5% to 3.75%) at the central bank's upcoming September 15-16 meeting.
The primary focus for traders this week is August's jobs report, expected Friday morning. Economists surveyed by Dow Jones project 53,000 nonfarm payrolls added last month, a notable increase from July's loss of 23,000 jobs, with the unemployment rate anticipated at 4.1%.
José Torres, senior economist at Interactive Brokers, noted that upcoming inflation statistics next week would also be crucial. However, he emphasized that 'ongoing decreases in employment should be enough for the central bank to start considering the labor side of its mandate when prescribing policy, rather than maintaining an unwavering commitment to quelling price pressures.' He specifically mentioned watching the consumer price index and producer price index reports.
Currently, U.S. stocks are on track for a winning week, with the S&P 500 poised for a 0.5% advance, the Nasdaq for a 0.7% gain, and the Dow for a 0.2% jump.
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European markets open lower; Volkswagen gains after confirming mass job cuts
Europe's Stoxx 600 index opened 0.18% lower on Friday, following a three-session losing streak that ended Thursday. Most sectors were in the red, with chemicals leading losses, down 1%. Autos bucked the trend, however, as shares of Volkswagen popped 7% after the German automaker's board approved plans to cut up to 50,000 additional jobs, bringing total potential cuts in its turnaround strategy to 100,000.
— Jenni Reid
European gas prices trading near three-year high
Natural gas prices in Europe are hovering near a three-year high, having reached their peak in early 2023 on Wednesday. Gas traded on the Dutch TTF, the European benchmark, closed above 73 euros ($84.90) per megawatt-hour on Wednesday. Front-month futures contracts were last seen trading at approximately 71.30 euros, an intraday decline of just over 3%. Europe's gas stores are currently only two-thirds full, according to the Aggregated Gas Storage Inventory database. Energy prices on the continent surged after Russia's full-scale invasion of Ukraine in 2022 and have also been pressured by the U.S.-Iran war, as many European nations are net importers of energy commodities.
— Chloe Taylor
Oil rises amid worries over lingering Iran-U.S. tensions
Oil prices rose Friday, driven by persistent concerns over supply disruptions due to ongoing tensions between Iran and the U.S. Futures for international benchmark Brent crude for November delivery gained 0.41% to $95.91 a barrel. U.S. West Texas Intermediate futures for October advanced 0.69% to $91.93 per barrel. Military hostilities in the region have escalated recently, reigniting fears of a broader conflict and extended interruptions to energy flows via the Strait of Hormuz. Quoc Dat Tong, senior financial markets strategist at Exness, noted that 'Physical flows in the Strait of Hormuz remain constrained, with traffic levels below normal.' He added that 'ongoing efforts to sustain energy exports from the region help limit the upside bias for crude prices.'
—Justina Lee
Treasury yields steady as traders weigh Waller’s signal for a September pause
Treasury yields remained stable across the curve on Friday as traders continued to evaluate Federal Reserve Governor Christopher Waller’s remarks suggesting he was inclined to keep interest rates unchanged at the central bank's policy meeting in two weeks. The 10-year Treasury note yield, a key benchmark for mortgages, was little changed at 4.766%. The longer-dated 30-year Treasury yield dropped about 1 basis point to 5.241%. The shorter 2-year Treasury note yield, which typically tracks short-term Federal Reserve interest rate decisions, was 1 basis point higher at 4.344%. Interactive Brokers indicated in a note on Friday that Waller's comments, alongside similar statements from New York Fed President John Williams regarding easing inflation pressures, contributed to a broader dovish shift among policymakers. The brokerage added that expectations for lower rates were supporting Treasuries, especially shorter-dated maturities sensitive to Fed policy, while an increase in Challenger job cuts also boosted demand for fixed-income assets.
—Lee Ying Shan
Bitcoin hovers near $81,000 level with U.S. crypto legislation in focus
Bitcoin slid 0.79% to $80,903 on Friday, after briefly topping $81,000 the previous day to reach its highest level in nearly four months. Ether traded 0.15% lower at $2,510.64. Diana Pires, chief business officer at sFOX, stated that further gains would hinge on sustained institutional participation and greater clarity on the Federal Reserve's rate trajectory. She also highlighted that strong spot bitcoin ETF inflows and increased trading activity suggest the rally has broadened beyond an initial short squeeze. The crypto industry's most significant legislative push, the Clarity Act, which aims to establish a federal framework for crypto markets, faces an uncertain path this month, representing a major test for an industry that has extensively lobbied Washington for clear digital asset regulations.
—Lee Ying Shan
Japanese yen holds near multi-month highs as expectations for intervention, BOJ rate hike rise
The Japanese yen traded at 155.89 against the dollar on Friday, after strengthening to its strongest point since February on Thursday. This movement reflects traders weighing the possibility of further Japanese currency intervention and growing expectations for Bank of Japan rate hikes. The yen notably jumped more than 2% against the greenback on Thursday, touching 155.28 per dollar at one point, according to LSEG data. JPMorgan, however, maintains its expectation for the yen to weaken to around 160 against the dollar, believing Japanese authorities will prioritize currency stability while the BOJ gradually raises rates. The bank's note on Friday stated, 'We remain neutral on the Japanese yen and expect USDJPY to hover around 160 as authorities prioritize currency stability. This view assumes the BOJ delivers 3-4 rate hikes over the next 12 months, taking policy rates to around 2%.'
—Lee Ying Shan
South Korea's Kospi, Japan's Nikkei 225 open higher
Asia-Pacific markets opened mostly higher Friday. South Korea's Kospi jumped 1.32%, while the small-cap Kosdaq was 1.99% higher. Japan's Nikkei 225 added 0.25%, but the Topix index dipped 0.46%. Australia's S&P/ASX 200 rose 0.14%.
— Lee Ying Shan
Asia-Pacific markets are set to track Wall Street gains
Asia-Pacific markets were poised to climb Friday, tracking Wall Street gains overnight as Treasury yields eased. Japan's Nikkei 225 was set to rise, with the Chicago and Osaka futures contracts last at 64,665 and 64,660 respectively, compared with the index's previous close of 64,214.48. Hong Kong's Hang Seng index futures were at 25,421, higher than the index's last close of 25,213.31. Futures for Australia's S&P/ASX 200 last traded at 9,037, compared with the index's previous close of 9,020.1.
— Lee Ying Shan
Stocks making the biggest moves after hours
Several stocks experienced dramatic movements in extended trading following their latest earnings reports. Lululemon Athletica shares tanked 18% after the company issued a disappointing forecast for the current quarter, projecting earnings between 93 cents and 98 cents per share on revenue of $2.29 billion to $2.32 billion, significantly below analyst expectations. Conversely, Docusign, the software company, jumped more than 4% after surpassing earnings and revenue estimates in its second-quarter financial report. Docusign also raised the upper end of its full-year revenue guidance and its full-year forecast for its non-GAAP operating margin. Read more about movers in extended trading here.
—Darla Mercado
Stock futures open little changed Thursday night
Stock futures opened with minimal change on Thursday night. Futures linked to the Dow Jones Industrial Average slipped 10 points (0.02%). S&P 500 futures lost 0.06%, and Nasdaq-100 futures were down 0.1%.
—Darla Mercado
