Stock futures opened higher Thursday evening, extending gains as investors awaited a key report on the labor market’s recovery.
Contracts on the S&P 500 ticked up after the index logged a third straight session of gains during Thursday’s regular trading day. The move to the upside came after Senate leaders said they reached an agreement on raising the government borrowing limit into December, helping avert a default as soon as this month.
With concerns over the government debt ceiling pushed off, investors have fixed their attention toward the latest monthly jobs report from the Labor Department. This report is expected to show an acceleration in job growth after a disappointing August print, when just over 200,000 jobs were created versus the more than 700,000 expected.
Consensus economists expect Friday’s report to show that non-farm payrolls rose by 500,000 in September, with the unemployment rate dipping to 5.1% to reach a fresh pandemic-era low. Average hourly earnings likely rose at a 4.6% year-over-year rate, or the fastest since February, in another print affirming inflationary pressures taking place across the U.S. economy.
“I think people want to continue to see [payroll] gains. People are more fixated on the jobs created more than anything else. I think the wages are more important for people who are worried about inflation,” Julie Biel, portfolio manager at Kayne Anderson Rudnick, told Yahoo Finance Live on Thursday. “For us, seeing modest wage inflation is a positive because if you think about the U.S. economy, it’s primarily a consumer economy … so it is a positive for the economy longer-term. But it is a negative for profit margins which have been at all-time highs.”
Though employment has yet to return to pre-pandemic levels, improvements in the labor market have picked up in tandem with falling coronavirus cases. Other data have also pointed to these trends, with new weekly jobless claims coming in at their second-lowest since March 2020 on Thursday, and ADP’s private payrolls report showing a better-than-expected 568,000 job gains in September earlier this week.
For investors, a solid jobs report would also likely be enough to trigger the start of tapering by the Federal Reserve. The central bank already signaled last month that it was inclined to remove some of its highly accommodative monetary policies as the recovery made further headway. And Fed Chair Jerome Powell said it would only take a “reasonably good report” for September employment to signal the labor market had reached the Fed’s threshold for tapering.
6:07 p.m. ET Thursday: Stock futures extend earlier gains
Here’s where markets were trading Thursday evening:
S&P 500 futures (ES=F): +3.25 points (+0.07%), to 4,393.25
Dow futures (YM=F): +23 points (+0.07%), to 34,661.00
Nasdaq futures (NQ=F): +17.50 points (+0.12%) to 14,898.75
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter