Oct 2 (Reuters) – US stock index futures rose on Friday as Treasury yields dropped on lower chances of an interest-rate hike this month and oil prices eased, while investors awaited a key jobs report due later in the day.
Brent crude prices slipped below $100-a-barrel after a report that the European Union discussed additional diesel and crude stock releases, even though there were no new updates on the resolution to the Middle East conflict.
Chips and megacaps led the gains. Nvidia added nearly 0.9%, while Broadcom and Advanced Micro Devices rose about 1% each. Alphabet and Tesla were up nearly 1% each.
Nike fell 10% after US sportswear company forecast a surprise steep drop in annual revenue due to weakness in China, announced job cuts and decided to shake up its global business divisions.
Investor focus will shift to nonfarm payrolls data for September at 8:30 a.m. ET, with economists anticipating US job growth to slow down and unemployment to hold steady at 4.1% for a third straight month.
Investors will gauge the data along with other indicators from earlier this week that pointed to robust economic activity and slower-than-expected increase in prices but still above the central bank’s 2% target.
The inflation report and at least two top policymakers pushing back against a back-to-back rate hike in October have led investors to bet on the chances of a ‘hold’ by the Federal Reserve later this month.
At 04:59 a.m. ET, Dow E-minis were up 259 points, or 0.51%, and S&P 500 E-minis were up 38.75 points, or 0.5%. Nasdaq 100 E-minis were up 256 points, or 0.83%.
The yield on the 2-year Treasury note, more sensitive to rate expectations, hovered near the more than one-week low it touched on Thursday, when investors cited an improved risk/reward profile following the recent selloff.
Traders see a 76% chance of Fed rates staying unchanged in October, the CME Group’s FedWatch Tool showed, up from around 29% a week ago.
Despite the day’s advances, Wall Street’s main indexes were likely to end the week lower, with the S&P 500 set for a 1% drop.
Much of the losses were the result of pressure from Treasury yields hitting over two-decade highs earlier this week due to inflation and mounting debt concerns across developed economies.
Friday will also bring August data on factory orders along with comments by Dallas Fed President Lorie Logan.
Among other equities, Moderna gained 2.3% after index operator Nasdaq said the vaccine maker will replace Warner Bros. Discovery in the Nasdaq-100 index from October 9.
Reflecting the broader risk-on sentiment, bitcoin gained 2%, while Coinbase and Strategy rose nearly 3% each.
(Reporting by Johann M Cherian in Bengaluru; Editing by Arun Koyyur)
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