Dow Jones & Nasdaq 100: US Futures Dip as Jobs Report Looms
Later Friday, the US jobs report will influence the Fed rate path and demand for US stock futures. Economists expect unemployment to fall from 4.6% in November to 4.5% in December, with wage growth predicted to rise 3.6% year-on-year, up from 3.5% in November.
Weaker-than-expected wage growth and steady or higher unemployment would likely increase expectations of a March Fed rate cut, boosting demand for US equity futures. Typically, lower borrowing costs improve corporate earnings and raise equity valuations, lifting buyer demand.
Beyond the jobs report, traders should closely monitor Fed speeches. Reactions to the labor market data and views on the timing of rate cuts will affect risk appetite.
According to the CME FedWatch Tool, the chances of a March Fed rate cut fell from 43.2% on January 7 to 41% on January 8. Currently, the CME FedWatch Tool is indicating a 72.8% probability of a June cut.
Increased bets on an earlier rate cut would support the cautiously bullish near-term and bullish medium-term price outlook.
Key Technical Levels for Dow Jones, Nasdaq 100, and S&P 500
Despite the morning losses, the Dow Jones E-mini, the Nasdaq 100 E-mini, and the S&P 500 E-mini traded above their 50-day and 200-day EMAs. The EMAs indicated a bullish short- to medium-term outlook, aligning with positive fundamentals.
Near-term trends will hinge on geopolitical news, US labor market data, and Fed chatter. Key levels to monitor include:
Dow Jones
- Resistance: the January 7 record high of 49,876, and then 50,000.
- Support: 49,000 followed by the 50-day EMA (48,055).