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Futures muted as focus shifts to jobs data amid recession fears


Traders work on the trading floor at the New York Stock Exchange (NYSE) in New York City, U.S., March 31, 2023. REUTERS/Andrew Kelly

U.S. stock index futures were subdued on Thursday as investors awaited jobs data to gauge the impact of the Federal Reserve’s aggressive policy tightening on the U.S. economy.

Weak data from services and manufacturing sectors this week has pointed to slowing growth, fueling hopes in the market of a pause in interest rate hikes.

“There appears to be a feeling that markets want to believe that the economy is slowing, which it probably is, and that recent rate rises are to blame and the Fed will need to reverse course soon when it comes to rate policy” said Michael Hewson, chief market analyst at CMC Markets UK.

Fed fund futures are indicating a 58.2% chance of the U.S. central bank pausing its monetary tightening in May and a 45% chance of a rate cut at the Fed’s July meeting, according to CME Group’s Fedwatch tool.

At 5:17 a.m. ET, Dow e-minis were up 9 points, or 0.03%; and S&P 500 e-minis were down 2 points, or 0.05%.

Nasdaq 100 e-minis were down 31.75 points, or 0.24%, as major technology and growth shares such as those of Apple Inc (AAPL.O), Tesla Inc (TSLA.O) and Nvidia Corp (NVDA.O) fell between 0.2% and 1% in premarket trade.

The benchmark S&P 500 (.SPX) and the tech-heavy Nasdaq (.IXIC) are on track to notch declines for the first time in four weeks.

The U.S. stock market will be shut on Friday for the Good Friday holiday.

A Labor Department report on initial claims for state unemployment benefits last week is expected to show an increase to 200,000 from the prior period.

The much-awaited non-farm payrolls report for March will be released on Friday.

Remarks by St. Louis President James Bullard on the economy and monetary policy, later in the day, will also be parsed for clues on the Fed’s policy.

A slew of major U.S. banks will kick off the first-quarter earnings season next week, providing investors with more insight into the health of corporate America.

(This story has been corrected to say first quarter, not second quarter, in paragraph 12)

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