Stock futures fell in trading overnight on Thursday as investors awaited the September jobs report for further clues about the Federal Reserve’s tightening campaign.
Futures tied to the Dow Jones Industrial Average lost 12 points, or 0.04%, while S&P 500 futures fell 0.15%. Nasdaq 100 futures fell 0.29%.
Advanced Micro Devices stock fell in trading overnight after the chipmaker warned its third quarter revenue would be lower than expected. Shares of Levi Strauss slid following a reduction in guidance.
The major averages closed lower during regular trading, but are on track to cap their best week since June 24 and end around 4% higher. The Dow Jones fell 346.93 points, or 1.15%, to 29,926.94, while the S&P 500 and Nasdaq Composite lost 1.02% and 0.68%, respectively.
All major S&P sectors ended the session in negative territory, with the exception of energy. The sector rose 1.8% as oil prices rose and is poised to end the week up 14.7%.
Thursday’s drop comes as investors remain nervous ahead of the September jobs report due out on Friday. The results could provide greater certainty in the Fed’s tightening cycle, with a strong job market or an upside surprise signaling that the Fed may need a tougher stance to slow the economy and bring the surge in prices under control. Economists polled by Dow Jones expect the data to show a 275,000 rise in nonfarm payrolls and unemployment to 3.7%.
“The environment is ripe for a crisis and if the Fed maintains its hawkish communication, I think we are very likely going to have something broken in the financial markets,” said Scott Minerd, Guggenheim’s global chief investment officer on “Closing Bell: Overtime” from CNBC. ” Thursday.
Minerd said the pace of tightening was starting to create fissures in financial markets and could force a pivot from the Fed 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 announce it in advance, they’re not going to ring a bell.”
A downside surprise occurring 75% of the time over the past 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 on Friday. Cannabis inventory Tilray Brandswho rose on Thursday as the White House announced marijuana pardonswill publish the winning results.