U.S. stock index futures are indicating a stronger start to Friday’s session, with equities poised to move higher after two straight days of mixed closes.
Sentiment has been lifted by the release of the Labor Department’s closely followed December employment report, which appears to have been taken positively by markets.
Although job growth came in below expectations, the softer reading is being interpreted as supportive for the interest rate outlook. Slower hiring may ease pressure on the Federal Reserve, potentially reinforcing expectations for rate cuts later in the year.
According to the Labor Department, nonfarm payrolls increased by 50,000 in December, following a downwardly revised gain of 56,000 in November. Economists had been looking for an increase of around 60,000 jobs, compared with the 64,000 initially reported for the prior month.
The report also showed the unemployment rate edging down to 4.4% in December, from a revised 4.5% in November. Markets had expected the rate to ease slightly to 4.5%, from the previously reported 4.6%.
While the Federal Reserve is still broadly expected to keep interest rates unchanged at its upcoming meeting later this month, the data may strengthen confidence that further rate cuts could be delivered later in the year.
U.S. stocks ended Thursday’s session mixed once again. The Dow Jones Industrial Average rebounded from the prior day’s decline, while the technology-heavy Nasdaq posted its first loss in four sessions.
The Dow rose 270.03 points, or 0.6%, to 49,266.11, moving back toward the record closing high reached earlier in the week. The S&P 500 edged up by just 0.53 points to 6,921.46, while the Nasdaq fell 104.26 points, or 0.4%, to 23,480.02.
The uneven performance reflected a degree of caution among investors, with many reluctant to make larger bets ahead of the monthly jobs data.
Earlier on Thursday, another Labor Department report showed initial jobless claims rose slightly less than expected in the week ended January 3. First-time claims increased to 208,000, up 8,000 from the prior week’s revised figure of 200,000. Economists had forecast a rise to around 210,000.
Sector moves were pronounced, with energy stocks surging as crude oil prices jumped sharply. The Philadelphia Oil Service Index climbed 4.3%, while the NYSE Arca Oil Index gained 3.6%.
Housing-related stocks also showed notable strength, highlighted by a 3.4% rise in the Philadelphia Housing Sector Index.
By contrast, weakness in networking, biotechnology and semiconductor shares weighed on technology stocks, contributing to the Nasdaq’s decline.