(Bloomberg) — European and US stock futures edged lower in muted trade as investors tread cautiously ahead of US jobs data, which will help illuminate the path ahead for interest rates.
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The Euro Stoxx 50 futures dropped 0.3% while S&P 500 futures declined 0.2%. Gains in mainland China lifted Asian stocks Friday, while a Hong Kong gauge of technology stocks was poised to enter a technical bull market.
Treasuries were steady after small declines across the curve Thursday. An index of the dollar edged higher.
The mixed moves underscored a lack of direction ahead of US nonfarm payroll figures due later Friday, which will refocus traders away from the drama over tariffs that rattled financial markets earlier in the week. A weak print could boost expectations for further Federal Reserve cuts, while a stronger-than-expected number may have the opposite effect.
“The market is going to continue to be a bit direction less,” Amy Xie Patrick, head of income strategies for Pendal Group, said on Bloomberg Television. She is focused on holding quality assets “and looking for safer havens and the ability to move things around,” she said.
The Hang Seng Tech Index rose as much as 2.9%. The advance has propelled the benchmark more than 20% from a January low, meeting the definition for a bull market, after a cheap artificial intelligence model from startup DeepSeek ignited interest in China’s internet firms.
“The Hang Seng and MSCI China have higher weightings of stocks that the market perceives to be beneficiaries of the newly popular DeepSeek theme,” said Chetan Seth, Asia Pacific equity strategist at Nomura Holdings Inc.
Friday’s jobs report is expected to show 175,000 new roles added to the US economy. Separate jobs data released Thursday showed initial jobless claims picked up while labor productivity remained robust. In addition to the employment print Friday, Wall Street will be closely watching a revision to job growth. Economists predict that will be substantial, but probably not as bad as initially estimated.
“As long as Friday’s jobs report shows that the economy added 170,000-200,000 jobs during the month, the market should largely absorb this number with little volatility,” said Gaurav Mallik at Pallas Capital Advisors. “If we see a number much stronger than this, it could remove the prospects of any rate cuts this year, and if it’s a number much lower, it could raise worries about a weakening labor market.”
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Revision Risk
Every year, the January employment report from the Bureau of Labor Statistics comes with revisions for the 12 months through the previous March. Those adjustments traditionally don’t get much attention. But this week they will, because the agency’s preliminary estimate in August suggested the downward revision would be 818,000 — the largest since 2009.
Fed Chair Jerome Powell said last week officials want to see more progress on inflation and would be looking for “serial readings” showing price pressures moving in the right direction. For now, traders still see the Fed’s next move as a cut — although likely not until mid-year. Treasury yields hit 2025 lows this week.
The yen weakened against the dollar Friday, placing the currency on track for its first decline against the greenback in five sessions. Japanese Prime Minister Shigeru Ishiba prepares to meet with US President Donald Trump on Friday.
“Hawkish headlines from Japanese officials on domestic policy rates have created some enthusiasm,” for the yen, while “the dollar has lost its tailwind for now,” said Jerry Minier, co-head of G10 FX trading for Barclays.
India delivered its first rate cut since 2020, slashing a key benchmark rate 25 basis points to 6.25%. The move was expected, although some analysts had anticipated a 50 basis point reduction.
Elsewhere, Treasury Secretary Scott Bessent said that his department is conducting outreach to major holders of government securities to get a better picture on their thoughts on the federal debt limit. Bessent also said he favors a strong dollar and has no plans to alter the government’s debt-issuance plans.
Shares in Amazon.com Inc. fell in after-hours trading following earnings results that showed projected profits for the current quarter below analysts’ estimates. The shortfall indicates the company continues to ramp up spending to support artificial intelligence services.
In commodities, gold rose after retreating from a record high Thursday, its first decline in six sessions. Oil also edged higher after falling Thursday as Trump’s renewed pledge to drive down the price of crude overshadowed his push for tighter Iranian sanctions.
Key events this week:
US nonfarm payrolls, unemployment, University of Michigan consumer sentiment, Friday
Fed’s Michelle Bowman, Adriana Kugler speak, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.1% as of 2:55 p.m. Tokyo time
Japan’s Topix fell 0.4%
Hong Kong’s Hang Seng rose 0.7%
The Shanghai Composite rose 1%
Euro Stoxx 50 futures fell 0.3%
Currencies
The Bloomberg Dollar Spot Index rose 0.1%
The euro was little changed at $1.0375
The Japanese yen fell 0.2% to 151.76 per dollar
The offshore yuan was little changed at 7.2937 per dollar
Cryptocurrencies
Bitcoin rose 0.5% to $97,334.86
Ether rose 0.1% to $2,713.45
Bonds
The yield on 10-year Treasuries advanced one basis point to 4.45%
Japan’s 10-year yield advanced 1.5 basis points to 1.290%
Australia’s 10-year yield advanced four basis points to 4.36%
Commodities
West Texas Intermediate crude rose 0.4% to $70.89 a barrel
Spot gold rose 0.2% to $2,863.13 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Winnie Hsu.
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