US Stock Futures Slip Before Crucial Jobs Report: Markets Wrap

A cautious tone dominated markets before a key US jobs report that may give traders insight on the Federal Reserve’s policy path.

US equity futures edged lower. Modest gains in the dollar put the greenback on course to rise for the ninth week out of the last 10. Treasury yields ticked higher. Oil extended its slide to a third day.

Economists estimate that US nonfarm payrolls rose by 220,000 in November as hiring rebounded from weather-related and strike disruptions. It’s the final payrolls report before the Fed’s next interest-rate decision, with swaps trading putting the odds of a quarter-point reduction later this month at around 65%. 

“If we get a surprisingly hot number, you can expect pricing to come back more to 50-50,” said Michael Brown, a senior strategist at Pepperstone. “Given the time of the year, market volumes are lighter than usual, so you are more likely to see an outsize reaction — and that’s another reason for people to sit on their hands.”

France’s week of political tumult was set to end positively in markets. The nation’s bonds outperformed euro-area peers after National Rally leader Marine Le Pen told Bloomberg News a budget could be delivered within weeks. The euro was steady. The CAC 40 index climbed more than 1%, rising for a seventh day in the longest winning streak in almost 10 months.

Friday’s US labor market reading will have a big say over whether the S&P 500 can build on its 27% rally this year. Excitement around artificial intelligence and optimism that President-elect Donald Trump’s policies will boost US markets have propelled the benchmark toward its best year since 2019.

Bank of America Corp. strategist Michael Hartnett said that powerful rally in US stocks as well as cryptocurrencies has left the asset classes looking frothy.

The S&P 500’s price-to-book ratio has surged to 5.3 times in 2024, approaching a peak of 5.5 hit in March 2000 during the height of the technology bubble, according to data compiled by Bloomberg. BofA’s Hartnett said there’s a high risk of “overshoot” in early 2025 if the S&P 500 nears 6,666 points — about 10% above current levels. 

On Bitcoin, Hartnett said that with a market capitalization of over $2 trillion, the digital asset was comparable in size to the 11th largest economy in the world. On Friday, bitcoin pulled back from a record high set above $103,000, with its slump reaching as much as 7% at one point. 

In Asian trading, shares in China rose in a sign that investors were positioning for fresh economic support measures from a key policy meeting starting on Wednesday. 

South Korea was another focal point, with the won paring losses from earlier declines after the nation’s Army Special Forces Commander said there will be no second martial law. The country’s benchmark stock index fell as much as 1.8% before paring the drop.

In commodities, oil added to its declines on concerns that OPEC ’s decision to push back the revival of halted production won’t prevent a surplus forming next year.

Some of the main moves in markets:

This story was produced with the assistance of Bloomberg Automation.

With assistance from Sagarika Jaisinghani and Divya Patil.

This article was generated from an automated news agency feed without modifications to text.