U.S. stock futures were mixed Friday morning ahead of a crucial jobs report that will provide another snapshot of the strength of the economy and provide further clues to the path of the Fed’s rate-hiking campaign.
Futures tied to the S&P 500 (^GSPC) were down 0.2% ahead of the open, while futures on the Dow Jones Industrial Average (^DJI) declined 0.3%. Contracts on the technology-heavy Nasdaq Composite (^IXIC) edged up by 0.1%. Bond yields are lower. The yield on the benchmark 10-year U.S. Treasury note ticked down to 3.82% Friday morning.
January’s job report blew past expectations, as the U.S. economy added more than half a million jobs and the unemployment rate dipped to 3.4%, a level not seen since 1969.
But economists aren’t expecting another surprise for Friday’s February jobs print. Consensus estimates from economists are for job gains of 225,000, a slower pace from the January’s blowout number. The unemployment rate is expected to hold steady at 3.4%.
“Signs of slowing outnumber signs of strength, making the chance that last month was a fluke likely,” Brad McMillan, Chief Investment Officer for Commonwealth Financial Network, wrote in a note Friday morning. “At the same time, labor demand continues strong, which suggests a significant drop is also unlikely. A return to the previous trend makes the most sense.”
The Federal Reserve has been keeping a close eye on all fronts to the labor market as the central bank tries to cool down inflation. The Friday’s jobs print will show whether January’s hiring gain was an outlier or the start of economic acceleration. Another key point of focus will be wage growth — and whether or not the trend accelerated last month.
Meanwhile, other recent data continues to show the economy remains resilient. Consumer spending surged in January, inflation stayed sticky, and business activity expanded in February.
The accumulation of economic data, coupled with comments this week from Chair Jerome Powell, has sparked the debate on whether a 0.25% or 0.50% rate hike from the Fed is likely for its March meeting.
However, recent events in the banking world have spurred other concerns for Fed officials as their monetary tightening policy induces stresses into the banking system.
A major tech firm lender revealed it’s in deep trouble. Silicon Valley Bank’s (SIVB) share price tanked 60% on Thursday, wiping out $9.6 billion of market value after announcing it needs to raise $2.25 billion to offset a $1.8 billion loss on some bond sales.
The sour sentiment has spread across markets as the KBW Bank index (^BKX) was down over 7%, while index members including Bank of America (BAC) and JPMorgan Chase (JPM) edged lower Friday morning in premarket trading.
Elsewhere, in the cryptocurrency market, Bitcoin (BTC) crumbled below $20,000 Friday amid liquidation of Silvergate Capital (SI) and regulatory pressures on the industry.
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Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
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