US Index Futures Slide With Jobs Report in Focus

U.S. stock futures edged lower as caution ahead of U.S. jobs data encouraged a reduction in risk appetite following a four-day winning streak.

S&P 500 futures dipped 19 points, or 0.49% to 3886; Dow Jones Industrial Average fell 127 points, or 0.4% to 31240; Nasdaq 100 futures eased 71.25 points, or 0.59% to 12067.The S&P 500 has enjoyed four consecutive days of gains, its best winning run since the end of March, as some investors hoped that recent heavy losses — down 21% in the first half of the year — meant fears about declining corporate profits were now pretty much baked in.

Indeed, the second quarter U.S. earnings season kicks into gear later next week. But for now attention will be focused on the health of the U.S jobs market and what that means for the likely pace of Federal Reserve interest rate rises.

The nonfarm payrolls report is set for release at 8.30 a.m. Eastern. Analysts consensus forecasts are for a net 250,000 jobs to have been created in June, down from 436,000 in April and 390,000 in May. The pace of wage growth, expected to be 5%, will be scanned for signs of inflationary pressures.

The market may find itself once again adopting the mantra that “bad news is good news,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

A strong report could bolster the idea that the US economy can cope with the Fed becoming “more aggressive to fight inflation”, while a softer reading might signal “that the economy is not strong enough to shoulder back-to-back big rate hikes, after all,” she added.