Global markets are holding steady as traders anticipate the crucial August jobs report, while U.S. stock futures show little change following strong gains on Wall Street on Thursday. The Federal Reserve’s signal for a potential rate pause, coupled with surging energy prices amid geopolitical tensions and significant corporate news like Volkswagen’s job cuts, sets a complex backdrop for Friday’s trading.
Stock futures remained largely unchanged early Friday morning as investors eagerly awaited the release of August's pivotal payrolls report. This follows a strong performance on Thursday for major U.S. indexes.
Futures tied to the Dow Jones Industrial Average were flat, while S&P 500 futures saw a modest gain of 0.05%. Nasdaq-100 futures edged 0.17% higher, indicating cautious optimism.
Thursday's trading session saw the three major U.S. averages climb, with the 30-stock Dow surging over 600 points (1.2%), marking its best day since August 4. The S&P 500 advanced more than 1%, and the Nasdaq Composite climbed 1.4%.
Across Asia, markets opened 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 rose 0.89%, while Australia's S&P/ASX 200 was little changed.
U.S. stocks found momentum as Treasury yields pulled back. This retreat was spurred by Federal Reserve Governor Christopher Waller's indication that he would be "inclined" to support holding interest rates steady at the central bank's upcoming September 15-16 meeting, maintaining the current target range of 3.5% to 3.75%.
All eyes are now on August's jobs report, expected Friday morning. Economists polled by Dow Jones anticipate 53,000 nonfarm payrolls were added last month, with the unemployment rate projected at 4.1%. This compares favorably to a loss of 23,000 jobs in July.
José Torres, senior economist at Interactive Brokers, noted that while upcoming inflation statistics (Consumer Price Index and Producer Price Index) will be crucial, continuous decreases in employment should prompt the central bank to consider the labor market side of its mandate, rather than solely focusing on inflation control.
Looking at the week's performance, U.S. stocks are poised for gains. The S&P 500 is on track for a 0.5% advance, the Nasdaq for a 0.7% gain, and the Dow is heading for a 0.2% jump.
European markets open lower; Volkswagen gains after confirming mass job cuts
Europe's Stoxx 600 index started Friday 0.18% lower, after breaking a three-day losing streak on Thursday. Most sectors were in the red, with chemicals leading losses, down 1%.
Automotive stocks bucked the trend as Volkswagen shares surged 7%. This came after the German carmaker's board approved plans to cut up to 50,000 more jobs, potentially bringing the total 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 peaked earlier this week. The Dutch TTF, Europe's benchmark, closed above 73 euros ($84.90) per megawatt-hour on Wednesday. Front-month futures contracts were last seen trading around 71.30 euros, showing a slight intraday decline of just over 3%.
Europe's gas storage facilities are currently only two-thirds full, according to the Aggregated Gas Storage Inventory database. Energy prices on the continent surged following Russia's full-scale invasion of Ukraine in 2022 and have also been pressured by the U.S.-Iran war. Many European nations are net importers of energy commodities.
— Chloe Taylor
Oil rises amid worries over lingering Iran-U.S. tensions
Oil prices climbed on Friday, fueled by ongoing concerns over potential supply disruptions stemming from escalating 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.
Recent military hostilities in the region have intensified, reigniting fears of a broader conflict and extended interruptions to energy flows through the critical Strait of Hormuz.
Quoc Dat Tong, senior financial markets strategist at Exness, told CNBC 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. Traders continued to digest remarks from Federal Reserve Governor Christopher Waller, who indicated he was leaning towards keeping interest rates unchanged at the central bank's upcoming 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 approximately 1 basis point to 5.241%, while the shorter 2-year Treasury note yield, which often tracks short-term Fed rate decisions, rose 1 basis point to 4.344%.
Interactive Brokers noted on Friday that Waller's comments contributed to a broader dovish shift among policymakers, echoing similar sentiments from New York Fed President John Williams regarding easing inflation pressures. The brokerage highlighted that expectations for lower rates were supporting Treasuries, especially shorter-dated maturities sensitive to Fed policy, and a rise 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, reaching its highest level in nearly four months. Ether last 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 pointed out that strong spot Bitcoin ETF inflows and increased trading activity suggest the rally has broadened beyond initial short squeezes.
The crypto industry's most significant legislative push, the Clarity Act, faces an uncertain future this month. This proposed bill, which aims to establish a federal framework for crypto markets, represents a major test for an industry that has extensively lobbied Washington for clearer regulations governing digital assets.
—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, following its appreciation to its strongest level since February on Thursday. Traders are weighing the possibility of further Japanese currency intervention and growing expectations for Bank of Japan (BOJ) rate hikes.
The yen surged more than 2% against the greenback on Thursday, briefly touching 155.28 per dollar, according to LSEG data.
Despite this, JPMorgan still anticipates the yen to weaken towards 160 against the dollar. The bank believes Japanese authorities will prioritize currency stability while the BOJ continues to raise rates, projecting 3-4 rate hikes over the next 12 months, bringing policy rates to around 2%.
—Lee Ying Shan
South Korea's Kospi, Japan's Nikkei 225 open higher
Asia-Pacific markets largely opened higher on Friday.
South Korea's Kospi jumped 1.32%, and the small-cap Kosdaq was 1.99% higher. Japan's Nikkei 225 added 0.25%, though 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 expected to climb on Friday, tracking Wall Street's overnight gains driven by easing Treasury yields.
Japan's Nikkei 225 was poised to rise, with its Chicago and Osaka futures contracts trading at 64,665 and 64,660 respectively, compared to 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, against the index's previous close of 9,020.1.
— Lee Ying Shan
Stocks making the biggest moves after hours
Several stocks experienced significant movements in extended trading following the release of their latest earnings reports.
Lululemon Athletica shares tanked 18% after the sportswear manufacturer issued a downbeat forecast for the current quarter. Lululemon projected earnings between 93 cents and 98 cents per share on revenue of $2.29 billion to $2.32 billion, falling short of analysts' expectations of $2.40 per share and $2.53 billion.
Docusign, the software company, jumped over 4% after reporting an earnings and revenue beat for its second-quarter financial report. Docusign also raised the high end of its full-year revenue guidance and its full-year forecast for non-GAAP operating margin.
—Darla Mercado
Stock futures open little changed Thursday night
Stock futures opened largely unchanged on Thursday night, reflecting a cautious sentiment.
Futures linked to the Dow Jones Industrial Average slipped 10 points, or 0.02%. S&P 500 futures lost 0.06%, and Nasdaq-100 futures were down 0.1%.
—Darla Mercado
