US stocks remained steady and Treasuries saw modest gains as investors anticipated Friday's jobs report. This data is crucial in determining whether the Federal Reserve will raise interest rates in September. S&P 500 futures were largely unchanged, while Lululemon Athletica Inc. experienced a decline after revising its full-year outlook. Conversely, chip-related and space stocks performed well. Longer-dated Treasuries gained, with the 10-year yield dropping one basis point to 4.75%. Brent crude eased towards $95 a barrel, and the dollar remained flat. Bitcoin, despite a fall, was still on track for its third consecutive week of gains.
The August jobs report is particularly significant, as the odds of a quarter-point Fed rate hike this month are currently about even. Although Fed Chair Kevin Warsh has emphasized the central bank's focus on inflation, the employment data could provide policymakers with additional time to evaluate if current monetary policy is sufficiently restrictive to control price pressures. Economists project a 55,000 increase in payrolls for August, following an unexpected dip in July employment. This would align with the average job growth observed this year, and the unemployment rate is expected to hold steady at 4.1%.
According to Linh Tran at XS.com, the market requires a jobs report that is weak enough to deter the Fed from raising interest rates but not so weak as to heighten recession concerns. Stronger-than-expected employment and wage growth, however, could lead to higher yields and negatively impact equities. Conversely, figures that align with expectations and indicate moderating wage growth would create favorable conditions for the S&P 500 to retest its record high. As of 9:42 a.m. London time, the Stoxx Europe 600 fell 0.1%. Nasdaq 100 futures rose 0.4%, marking their third consecutive day of gains, the longest streak since August 27, 2026. The MSCI Asia Pacific Index rose 0.8% to its highest level since June 22, 2026, and the MSCI Emerging Markets Index increased by 1.4%, its largest closing gain since August 20, 2026.
In the commodities market, Brent crude decreased by 0.3% to $95.23 a barrel, while spot gold rose by 0.1% to $4,478.44 an ounce. The yield on 10-year Treasuries declined one basis point to 4.75%. Germany's 10-year yield advanced one basis point to 3.36%, and Britain's 10-year yield also advanced one basis point to 5.15%.
