Dow Jones & Nasdaq 100: US Futures Slide on Venezuela Oil Seizure
Crucially, while Venezuela may not account for a material proportion of China’s oil imports, the declaration coincided with reports of the US seizing a Russian-flagged oil tanker and a Panama-flagged tanker bound for China.
US Jobs Report and Fed Rate Cut Bets
The increasing geopolitical tensions weighed on sentiment midweek, while uncertainty about the Fed rate path added to the negative mood.
US futures posted losses during the Asian morning session on Thursday, January 8, extending their previous day’s losses. The Nasdaq 100 E-mini and the S&P 500 E-mini declined 56 points and 8 points, respectively, while the Dow Jones E-mini dropped 73 points.
Later on Thursday, US labor market data will influence demand for risk assets ahead of tomorrow’s highly anticipated jobs report. While third-quarter unit labor costs and nonfarm productivity figures will influence risk appetite, jobless claims are likely to be crucial for US equity futures.
A sharply higher-than-expected reading would fuel speculation about a March Fed rate cut, lifting sentiment. Ahead of today’s data and tomorrow’s jobs report, US labor market and services sector PMI data cooled expectations of a March Fed rate cut, pushing US stock futures lower.
However, the jobless claims and Friday’s jobs report are likely to have a greater influence on the Fed rate path and risk assets than the previous data.
According to the CME FedWatch Tool, the chances of a March Fed rate cut fell from 48.5% on January 6 to 43.1% on January 7.