U.S. stock futures indicate a modestly higher open on Monday as investors weigh last week’s mixed market performance and weaker-than-expected payroll figures. Despite pulling back from intraday lows on Friday, the major indexes still closed slightly lower.
Friday’s Labor Department report showed U.S. nonfarm payrolls rose just 22,000 in August, well below economists’ forecast of 75,000. June’s data was also revised downward from a 14,000 gain to a 13,000 decline, while the unemployment rate ticked up to 4.3% from 4.2%.
“In the near-term, weaker jobs data will increase the odds of a Fed rate cut, but could create shorter-term volatility, as a weaker labor market is not a sign of strength,” said Larry Tentarelli, Chief Technical Strategist at Blue Chip Daily Trend Report.
CME Group’s FedWatch Tool now shows a 90.1% probability of a 25-basis-point rate cut by the Federal Reserve later this month, highlighting expectations that policymakers may respond to the softer labor market.
Investors are also focused on upcoming inflation reports, with producer prices due Wednesday and consumer prices on Thursday. Analysts expect producer price growth to hold at 3.3% year-over-year, while consumer prices may accelerate to 2.9% from July’s 2.7%, with core inflation steady at 3.1%.
Sector performance last week was uneven. Financial stocks lagged, with the NYSE Arca Broker/Dealer Index and KBW Bank Index down 1.9% and 1.8%, respectively. Oil producers fell amid extended weakness in crude, dragging the NYSE Arca Oil Index down 1.6%. In contrast, gold equities surged 2.5% alongside rising bullion prices, while steel, biotech, and housing sectors showed gains, helping to offset broader market weakness.
The major averages saw mixed weekly performance: the Nasdaq rose 1.1%, the S&P 500 added 0.3%, and the Dow slipped 0.3%.
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