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US Stock Futures Rise as Weak Jobs Data Eases Fed Hike Bets

US Stock Futures Rise as Weak Jobs Data Eases Fed Hike Bets. Source: Carlos Delgado, CC BY-SA 3.0, via Wikimedia Commons

U.S. stock futures moved slightly higher Sunday evening after Wall Street ended the previous session with gains, as weaker-than-expected September employment data reduced expectations for another Federal Reserve interest-rate hike this month.

S&P 500 Futures gained 0.1% to 7,784.0 points by 20:06 ET, while Nasdaq 100 Futures advanced 0.3% to 31,148.0. Dow Jones Futures were also up 0.1% at 51,513.0.

The modest gains followed Friday’s rally after Labor Department data showed the U.S. economy added only 29,000 jobs in September, significantly below economists’ forecast of 90,000. The unemployment rate increased to 4.2% from 4.1%, while August payroll growth was revised down to 133,000 from an initially reported 162,000.

Signs of a cooling U.S. labor market prompted investors to sharply reduce expectations for an October Fed rate hike. CME FedWatch data showed markets pricing in about an 80% probability that policymakers will leave interest rates unchanged this month.

Technology stocks, which are particularly sensitive to interest-rate expectations, benefited from the shift. The Nasdaq Composite climbed 1.2% on Friday, while the S&P 500 advanced 0.7% and the Dow Jones Industrial Average gained 0.5%.

However, elevated Treasury yields and high oil prices continued to limit optimism. Treasury yields initially declined following the employment report but later reversed course as investors remained concerned that rising energy costs could keep inflation above the Federal Reserve’s preferred levels.

Oil remains a major risk for U.S. markets as the conflict involving Iran continues to disrupt global energy supplies. Brent crude has remained above $100 per barrel, fueling concerns that prolonged supply disruptions could increase inflationary pressures.

Persistent energy inflation could complicate the Fed’s policy decisions despite evidence of weaker employment growth. Investors are also preparing for the third-quarter earnings season, which will provide fresh insight into whether high borrowing costs and elevated energy prices are beginning to pressure corporate profits and outlooks.

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