Friday Apr 5 2024 12:55
4 min
In early trading on Friday, Dow Jones index futures saw a modest increase, following the index's most significant downturn in over a year, as the market anticipates crucial employment data.
Dow futures edged up by 79 points for a gain of 0.2%. S&P 500 index futures and Nasdaq 100 futures also saw upticks of 0.3% and 0.4%.
This slight recovery comes in the wake of a major selloff on Wall Street which saw the Dow Jones Industrial Average (DJIA) index plunge by approximately 530 points, or 1.35%, marking its largest single-day decline since March 2023 and extending its losing streak to four days.
The S&P 500 index and the Nasdaq Composite also fell, dropping by 1.23% and 1.4% respectively.
The downturn in the major indices was exacerbated in the afternoon following a surge in crude oil prices and remarks from Neel Kashkari, President of the Minneapolis Federal Reserve, who raised doubts about the need for interest rate cuts amidst sticky inflation.
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Despite Kashkari's comments, overnight trading saw an increase in the implied probability of a U.S. interest rate cut in June, as indicated by the CME Group’s FedWatch tracker. It's worth noting that while Kashkari participates in discussions at the Federal Open Market Committee (FOMC) meetings, he will not be a voter until 2026.
The Dow is currently on track for a 3% decline on the week, potentially marking its worst weekly performance since March 2023.
The S&P 500 index and the Nasdaq have also seen weekly declines of approximately 2% each since the close on Thursday. This week's downturn follows a strong first quarter, prompting speculation among investors about whether a market correction might be on the horizon after recent significant gains.
Terry Sandven, chief equity strategist at U.S. Bank Wealth Management, commented on the dynamics to CNBC:
“Near term, equities are likely subject to some consolidation following robust first-quarter returns. A modest pullback would be within the normal ebb and flow of an upward-trending market”.
Markets are anticipating the release of key U.S. jobs data scheduled for Friday morning.
Forecasts from economists surveyed by Dow Jones predict nonfarm payrolls growing by 200,000, along with a slight decrease in the unemployment rate to 3.8% for March.
Another key indicator monitored for inflationary signals, average hourly earnings, is projected to increase by 0.3% month-over-month and 4.1% year-over-year.
Quincy Krosby, LPL Financial’s global chief strategist, told CNBC that the market continues to remain sensitive to any data that may indicate the Fed having to cut back on its monetary easing plans:
“The market remains highly sensitive to any indication that the data-dependent Fed may need to curtail a rate-easing cycle this year. Accordingly, the payroll report will provide important inflation-related data particularly with regard to the pace of wages”.
When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.
Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.
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