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U.S. stock futures rose cautiously on Friday, along with a move higher in Treasury yields, as investors focused on the key November jobs report that could test the current market forecast of a soft landing in the world's largest economy.
stocks got a big boost yesterday from a fresh rise in ai-related tech names, including Google. (GOOGLE) – Get a free report and advanced microdevices (amd) – Get a free report. This helped propel the Nasdaq to a nearly 200-point advance, extending its fourth-quarter gain to about 8.5%.
However, the broader S&P 500 closed Thursday trading just 0.8% higher as the months-long rally in Treasuries stalled. Benchmark 10-year bond yields rose to 4.15%, and again to 4.182% in the overnight session, ahead of today's jobs report.
Meanwhile, the US Dollar Index rose 0.18% in overnight trading to 103.733. The rally was complicated by another rise in the yen linked to comments from Bank of Japan officials suggesting the era of negative rates in the world's third-largest economy is coming to an end.
The focus on Friday, however, will be on the Labor Department's November jobs report at 8:30 a.m. ET. It is expected to show the economy added 180,000 new jobs in the month. past, with year-on-year wage growth moderating to around 4% and the overall unemployment rate remaining at 3.9%.
The Federal Reserve's next policy meeting looms next week, along with a busy series of Treasury auctions and a key reading on inflation in November. So there's a lot riding on today's jobs report to help shed light on the resilience of the labor market while also testing market bets that the Federal Reserve will cut rates in the spring.
CME Group's current FedWatch pegs the swings for a 0.25 percentage point rate cut in March at 51.9%, up from just 18.2% a month ago, with the odds of a move in May at a certainty of 99.7%.
That puts the S&P 500's current rally, which has lifted the benchmark index more than 6% so far this quarter, on hold ahead of the report. S&P futures indicate a modest opening gain of 7 points amid exceptionally thin overnight volumes.
Meanwhile, futures linked to the Dow Jones Industrial Average are priced for a 68-point advance, while those linked to the Nasdaq suggest a 65-point bullish move.
Global stocks were also in wait-and-see mode during the overnight session, with the MCSI World index on track for its first weekly decline since October.
In Europe, the Stoxx 600 rose 0.5% in early trading in Frankfurt, while Britain's FTSE 100 gained 0.37% in London.
Overnight in Asia, the yen's continued rise weighed on export and manufacturing stocks, sending the Nikkei down 1.76% at the close, while the broader MSCI benchmark excluding Japan rose 0.42%. .
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