Stock futures fall slightly as investors digest Fed minutes and await labor data

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

Spencer Platt | Getty Images

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

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

The moves follow a choppy trading session. Markets had fallen early in the day amid mixed economic data, but stocks rose in the closing bell. The Dow Jones ended the day up 133 points, or 0.4%, while the S&P 500 and Nasdaq added 0.8% and 0.7% respectively.

November’s Job Openings and Labor Rotation, or JOLTS, report showed the labor market remained strong, adding to fears that the Fed could continue to raise interest rates as long as there remains a hot market for workers. But the ISM manufacturing index showed the sector contracting after 30 months of expansion, which investors saw as a positive indicator that previous rate hikes had had the effect of cooling the economy.

The shares were mostly trading in the afternoon. But they gave up some of their gains after the release of minutes from the Fed’s December meeting showed the central bank remained committed to higher interest rates for “some time”.

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

“Every day that goes by and we get a data point that’s going in the right direction, that’s positive,” Buchanan said. “But it’s also quickly followed by apprehension about the sensitivity and delicacy of this moment.”

Investors will watch Thursday for more data on jobs, the trade deficit and business activity. Fed speakers Raphael Bostic and James Bullard are also expected to speak.

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

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