Stock futures ease slightly as investors digest Fed minutes, await jobs data

Traders work on the floor of the New York Stock Exchange (NYSE) on November 11, 2022 in New York.

Spencer Platt | Getty Images

Stock futures were slightly lower early Thursday morning as investors looked past the raucous minutes of the Federal Reserve meeting released in the afternoon to labor data due later this week.

Futures tied to the Dow Jones Industrial Average lost 101 points, trading down about 0.3%. S&P 500 and Nasdaq 100 futures were also down 0.29% and 0.36%.

Movements follow a choppy trading session. Markets fell early in the day amid mixed economic data, but stocks rallied late in the day. The Dow ended the day up 133 points, or 0.4 percent, while the S&P 500 and Nasdaq added 0.8 percent and 0.7 percent, respectively.

November’s job vacancies and labor turnover report, or JOLTS, showed the labor market remained strong, fueling concerns that the Fed may continue to raise interest rates while the labor market remains hot. But the ISM manufacturing index showed the sector contracted after 30 months of expansion, which investors saw as a positive indicator that previous rate hikes had had the intended effect of cooling the economy.

Shares traded mostly higher in the afternoon. But they gave up some of their gains after the release of minutes from the Fed’s December meeting, which showed the central bank remained committed to higher interest rates for a “period of time”.

Investors have “wounds that are still fresh” after 2022, which brought the worst year for the stock market since 2008, said Keith Buchanan, portfolio manager at GLOBALT Investments. He said investors were trying to balance what each new piece of economic data or Fed commentary might show with broader concerns about the future.

“Every day that goes by and we get a data point that’s moving in the right direction, that’s positive,” Buchanan said. “But it was also quickly followed by concerns about how sensitive and delicate this moment is.”

Investors will await more data on jobs, the trade deficit and business activity on Thursday. Fed speakers Rafael Bostic and James Bullard both are scheduled to speak.

On Friday, investors will review data on nonfarm payrolls, the unemployment rate and hourly wages. Because the report could have a big impact on the Fed’s next moves, it has the potential to affect the market. Investors don’t want to see big gains in wage growth.

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