U.S. equity futures advanced Friday as traders positioned for the Labor Department’s September employment report, a release expected to show hiring remained subdued but stable. The data could shape expectations for Federal Reserve policy after a sharp spike in Treasury yields over the past month.
At 4:23 p.m. (Bangkok Time), contracts tied to the Dow Jones Industrial Average and the S&P 500 each gained roughly 0.5%, while Nasdaq-100 futures climbed 0.8%.
The moves followed a modestly positive regular session. The Dow and Nasdaq Composite finished slightly higher, while the S&P 500 added 0.19% on the first trading day of October. Despite Thursday’s gains, all three major indexes were headed for weekly declines, including a 1.7% drop for the Dow.
Bond markets remained a central focus for investors. The 10-year Treasury yield earlier reached 5.344%, its strongest level since 2002, before easing back. The 30-year yield also touched a 24-year high. By early Friday, yields were slightly lower.
Energy prices moved sharply in the opposite direction. Oil declined after reports that the U.K. and Europe were weighing the use of strategic fuel reserves. The Trump administration has urged European allies to release diesel inventories without delay. On Friday, Brent crude futures were down 2.92% to $99.32 a barrel. West Texas Intermediate fell 3.97% to $89.18 a barrel.
Friday’s main economic release is the September nonfarm payrolls report, following a stronger-than-expected August reading. Economists expect job creation to slow to 85,000 for the month, indicating a return to a more moderate pace of hiring.
A major deviation from forecasts may be needed to significantly alter expectations for another Fed rate increase this year, given the recent rise in Treasury yields. Traders have reduced wagers on an October move, though most still expect at least one quarter-point increase in December.
Recent comments from Fed officials have indicated that policymakers believe they have room to review incoming inflation data before taking further action. They have also maintained that inflation remains above acceptable levels.
Inflation pressures have been influenced by the Middle East war, now in its eighth month. President Donald Trump has said he is weighing renewed strikes on Iran after the midterm elections while also seeking a resolution to the conflict. On Thursday, Bloomberg reported that the U.S. had dispatched another aircraft carrier along with 10,000 sailors and Marines to the Persian Gulf.
