By Shubham Batra and Shashwat Chauhan
(Reuters) -Futures tied to the S&P 500 and the Nasdaq edged higher on Friday on dovish signals from Federal Reserve officials after a rally in the previous session following a report of a resilient labor market.
Chipmaker Nvidia led the gains in megacap technology stocks in premarket trading, with a 1.4% advance.
U.S. stocks jumped on Thursday after jobless claims last week fell more than expected. July’s dour jobs data had raised fears of a slowdown in the United States.
“Investors seem to be extremely sensitive to labor-related numbers and this is evident by the panic triggered by last week’s NFP report, as well as by the repricing (of interest rate cuts) just after the jobless claims yesterday,” Charalampos Pissouros, senior investment analyst at forex broker XM, said in a note.
“This confirms the narrative that good data is now good for stocks, even if this translates into fewer basis points worth of Fed rate cuts.”
Global markets too have stabilized after a rout earlier this week, triggered by a surge in yen as a surprise rate hike by the Bank of Japan resulted in unwinding of currency carry trades.
The CBOE Volatility Index, Wall Street’s “fear gauge”, declined to 23.62 points from a high of 65.73 at the start of the week.
Still, all major indexes were set for weekly losses, with both the S&P 500 and the Nasdaq headed for a fourth straight week of fall.
Money markets are evenly split between the Fed cutting rates by 50-basis points or 25-basis points in September, according to CME’s FedWatch Tool.
Fed policymakers said on Thursday they were more confident that inflation is cooling enough to allow interest-rate cuts ahead, and will take their cues on the size and timing of those cuts from the economic data.
Investors are now focusing on next week’s readings on the consumer prices and retail sales for July, which could provide fresh evidence on chances of a soft landing for the American economy.
At 06:45 a.m. ET, Dow E-minis were down 4 points, or 0.01%, S&P 500 E-minis were up 6 points, or 0.11% and Nasdaq 100 E-minis were up 41 points, or 0.22%.
Among individual stocks, Elf Beauty fell 8.6% after it forecast annual sales and profit below estimates, and said it would raise product prices if Republican presidential candidate Donald Trump comes to power and hikes tariffs on imports from China.
Take-Two Interactive Software climbed 6.2% as it expects net bookings to grow in fiscal years 2026 and 2027, as the videogame publisher gears up for the launch of its long-awaited “Grand Theft Auto VI” next year.
Expedia advanced 10.7% after the online travel agency beat analysts’ expectations for second-quarter profit, helped by sustained demand for international travel.
The Trade Desk jumped 6.5% after the ad tech firm forecast third-quarter revenue above analysts’ estimates, signaling strong demand for automated ad-buying technologies from connected TV companies.
(Reporting by Shubham Batra and Shashwat Chauhan in Bengaluru; Editing by Shinjini Ganguli)
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