Mixed Jobs Data May Lead To Choppy Trading On Wall Street

The major U.S. index futures are currently pointing to a roughly flat open on Friday, with stocks likely to extend the lackluster performance seen in the previous session.

The futures have seen some volatility following the release of the Labor Department’s closely watched report on employment in the month of January.

While the report on showed employment in the U.S. increased by less than expected in the month of January, it also showed the unemployment rate unexpectedly edged slightly lower.

The closely watched report said non-farm payroll employment rose by 143,000 jobs in January after surging by an upwardly revised 307,000 jobs in December.

Economists had expected employment to climb by 170,000 jobs compared to the jump of 256,000 jobs originally reported for the previous month.

The Labor Department said job growth in the healthcare, retail and social assistance sectors was partly offset by a decrease in employment in the mining, quarrying and oil and gas extraction industry.

Meanwhile, the report said the unemployment rate dipped to 4.0 percent in January from 4.1 percent in December. The unemployment rate was expected to remain unchanged.

The mixed data may lead to some uncertainty about the outlook for interest rates, keeping some traders on the sidelines.

Shortly after the start of trading, the University of Michigan is due to release its preliminary reading on consumer sentiment in the month of February. The consumer sentiment index is expected to inch up to 72.0 in February after falling to 71.1 in January.

The report also includes readings on year-ahead and long-run inflation expectations that could impact the outlook for interest rates.

Stocks showed a lack of direction over the course of the trading session on Thursday, with the major averages swinging back and forth across the unchanged line before eventually closing mixed.

The Nasdaq and the S&P 500 reached new highs for the session going into the end the day, closing higher for the third straight session.

The Nasdaq climbed 99.66 points or 0.5 percent to 19,791.99 and the S&P 500 rose 22.09 points or 0.4 percent to 6,083.57, but the narrower Dow fell 125.65 points or 0.3 percent to 44,747.63.

The choppy trading on Wall Street came as traders seemed reluctant to make significant moves ahead of the release of the Labor Department’s closely watched monthly jobs report on Friday.

A day ahead of the release of the more closely watched monthly jobs report, the Labor Department released a report showing first-time claims for U.S. unemployment benefits rose by more than expected in the week ended February 1st.

The report said initial jobless claims climbed to 219,000, an increase of 11,000 from the previous week’s revised level of 208,000.

Economists had expected initial jobless claims to rise to 213,000 from the 207,000 originally reported for the previous week.

A separate report released by the Labor Department showed U.S. labor productivity and unit labor costs both increased by less than expected in the fourth quarter of 2024.

Most of the major sectors showed only modest moves on the day, contributing to the lackluster performance by the broader markets.

Banking stocks moved notably higher over the course of the session, however, with the KBW Bank Index climbing by 1.5 percent to its best closing level in almost two years.

Considerable strength was also visible among computer hardware stocks, as reflected by the 1.3 percent gain posted by the NYSE Arca Computer Hardware Index.

Steel stocks also turned in a strong performance, while energy stocks were under pressure, dragging the NYSE Arca Oil Index and the NYSE Arca Natural Gas Index down by 1.6 percent and 1.5 percent, respectively.

Commodity, Currency Markets

Crude oil futures are climbing $0.50 to $71.11 a barrel after falling $0.42 to $70.61 a barrel on Thursday. Meanwhile, after sliding $16.30 to $2,876.70 an ounce in the previous session, gold futures are inching up $6.80 to $2,883.50 an ounce.

On the currency front, the U.S. dollar is trading at 151.81 yen versus the 151.41 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0369 compared to yesterday’s $1.0383.

Asia

Asian shares ended mixed on Friday, with mainland Chinese and Hong Kong markets rising sharply as DeepSeek AI optimism lifted tech stocks.

Regional markets elsewhere were subdued as Amazon issued a disappointing revenue forecast for the first quarter and investors awaited U.S. President Donald Trump’s next move on trade curbs ahead of China’s tariff deadline next week.

Traders also looked ahead to the release of the monthly U.S. jobs report as well as preliminary readings on consumer sentiment and inflation expectations in February later in the day for clues regarding the Federal Reserve’s next interest rate decision.

The jobs report may show that U.S. employment climbed by 170,000 jobs in January after an increase of 256,000 jobs in December. The jobless rate is seen holding steady at 4.1 percent.

The yen hit a nine-week high against the U.S. dollar after Bank of Japan board member Tamura advocated for raising interest rates to at least 1 percent by the end of 2025 fiscal year.

Separately, the International Monetary Fund cautioned that Japan should stay vigilant against potential spillover effects stemming from increased volatility in global markets.

Gold was set for a sixth straight weekly gain, driven by uncertainty over Trump’s tariff policies, which is fueling demand for hedging from central banks and investors. Oil prices remained on track for a third consecutive weekly decline, pressured by fears of a supply glut.

China’s Shanghai Composite Index jumped 1.0 percent to 3,303.67 and Hong Kong’s Hang Seng Index shot up 1.2 percent to 21,133.54, with technology stocks rising the most.

Japanese markets fell notably as the yen extended gains into a fifth day. The Nikkei 225 Index slid 0.7 percent to 38,787.02, while the broader Topix Index settled 0.5 percent lower at 2,737.23.

U.S. President Donald Trump meets Japanese Prime Minister Shigeru Ishiba for the first time today in light of China’s rising military power and the shifting global balance of power.

Seoul stocks snapped a three-day winning streak, with battery and automotive shares underperforming. The Kospi dropped 0.6 percent to 2,521.92.

Hyundai Rotem soared 11.3 percent after a local securities firm forecast improved earnings for the defense equipment manufacturer this year.

Australian markets ended modestly lower, dragged down by gold and energy stocks. The benchmark S&P/ASX 200 Index edged down 0.1 percent to 8,511.40, while the broader All Ordinaries Index finished marginally lower at 8,780.30.

Across the Tasman, New Zealand’s benchmark S&P/NZX 50 Index closed up 0.5 percent at 12,902.19.

Europe

European shares are modestly lower on Friday after climbing to a record high the previous day on the back of robust quarterly earnings and eased concerns about a U.S.-led trade war.

Meanwhile, German industrial production fell the most in five months at the end of 2024, driven by a decrease in output from the car industry, official data showed.

Output decreased by 2.4 percent in December compared with the previous month. Analysts had predicted a 0.6 percent fall.

Elsewhere, U.K. house prices grew more than expected in January to hit a record high as buyer demand increased ahead of the stamp duty hike in April, mortgage lender Halifax said.

House prices increased 0.7 percent in January from December, reversing a 0.2 percent drop in the previous month. The monthly growth was also faster than economists’ forecast of 0.4 percent.

On a yearly basis, growth in house prices moderated to 3.0 percent from 3.4 percent in December.

While the German DAX Index is down by 0.1 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index are both down by 0.3 percent.

Iveco Group NV shares have moved sharply higher after the company said it was considering spinning off of its defense unit.

Denmark’s biggest lender Danske Bank has also surged after reporting solid financial results for the fourth quarter of 2024.

Legal & General has also soared. The British life insurer has agreed to sell its U.S. protection business to Meiji Yasuda Life Insurance Company for $2.3 billion.

German consumer goods maker Henkel has also risen. The company said it would sell its retailer brands business in North America to an affiliate of First Quality Enterprises.

On the other hand, emerging markets specialist Ashmore has tumbled as it reported a 33 percent decline in half-yearly profit.

U.S. Economic News

While the Labor Department released a report on Friday showing employment in the U.S. increased by less than expected in the month of January, the report also showed the unemployment rate unexpectedly edged slightly lower.

The closely watched report said non-farm payroll employment rose by 143,000 jobs in January after surging by an upwardly revised 307,000 jobs in December.

Economists had expected employment to climb by 170,000 jobs compared to the jump of 256,000 jobs originally reported for the previous month.

Meanwhile, the report said the unemployment rate dipped to 4.0 percent in January from 4.1 percent in December. The unemployment rate was expected to remain unchanged.

Federal Reserve Board Governor Michelle Bowman is scheduled speak on bank regulation before the 2025 Wisconsin Bankers Association Bank Executives Conference at 9:25 am ET.

At 10 am ET, the University of Michigan is due to release its preliminary reading on consumer sentiment in the month of February. The consumer sentiment index is expected to inch up to 72.0 in February after falling to 71.1 in January.

The Commerce Department is also scheduled to release its report on wholesale inventories in the month of December at 10 am ET. Wholesale inventories are expected to decrease by 0.5 percent.

At 12 pm ET, Federal Reserve Board Governor Adriana Kugler is due to speak on “Entrepreneurship and Aggregate Productivity” before the 2025 Miami Economic Forum.

The Federal Reserve is scheduled to release its report on consumer credit in the month of November at 3 pm ET. Consumer credit is expected to increase by $16.0 billion in December after unexpectedly falling by $7.5 billion in November.