Market Snapshot: U.S. stock futures higher as jobs data swings into focus, and debt-ceiling drama ends

By: market watch Posted On: June 02, 2023 View: 23

U.S. stock index futures pointed to a higher open for Wall Street on Friday after a debt-ceiling bill passed the Senate and as investors turned their attention to jobs data for May that could help cement a pause in Federal Reserve interest-rate hikes.

How are stock-index futures trading?

S&P 500 futures ES00, +0.50% rose 22 points, or 0.4%, to 4,250
Dow Jones Industrial Average futures YM00, +0.51% rose 174 points, or 0.5%, to 33,277
Nasdaq-100 futures NQ00, +0.57% rose 73 points, or 0.5%, to 14,544

On Thursday, the S&P 500 SPX, +0.99% advanced by 41.19 points, or 1%, to end at 4,221.02, the highest settlement since Aug. 19, according to Dow Jones Market Data. The Dow Jones Industrial Average DJIA, +0.47% rose 153.30 points, or 0.5%, to finish at 33,061.57, and the Nasdaq Composite COMP, +1.28% added 165.70 points, or 1.3%, to 13,100.98, the highest close since Aug. 16.

What’s driving markets?

Markets were breathing a sigh of relief after the U.S. Senate voted to raise the federal debt ceiling late Thursday, averting a government default, and the measure now on its way to to President Joe Biden’s desk to be signed into law.

See: Senate passes debt-ceiling bill in 63-36 vote, sending it to Biden to get signed into law

The next set of jitters, though, may come from an expected flood of Treasury bill issuance as the government tries to rebuild its coffers that have been drained by the weeks-long standoff. Some analysts have warned of a potential liquidity squeeze that could trigger volatility for markets.

But investors have enough to keep them busy in the near term, with nonfarm payroll data, due at 8:30 a.m. Eastern. The U.S. is expected have added 180,000 jobs in May, down from 253,000 in the prior month, according to economists polled by The Wall Street Journal. That would mark the second-smallest increase this year.

Private-sector payroll data released earlier this week showed stronger-than-expected hiring, while weekly jobless claims indicated no signs of big layoffs. The unemployment rate and hourly wages will be released at the same time as nonfarm payrolls.

The fresh jobs data also comes a day after a report on manufacturing supported the picture of a continued slowing in the economy, even as jobs are growing. The data fueled a stock rally on Thursday as it inspired hopes that the Fed will leave interest rates on hold after its two-day policy meeting wraps up June 14.

“The Fed clearly sends a message that they no longer see urgency in hiking the rates, while also letting investors know that their job fighting inflation is not done just yet. That’s a way of managing market expectations: pausing rate hikes, without however letting the market conditions loosen due to excess dovish speculation,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank, in a note to clients.

Elsewhere, Asian markets rallied on news of the debt-ceiling deal agreement, with the Hong Kong Hang Seng HSI, +4.02% up nearly 4%, after skirting bear-market territory earlier this week, following sluggish China economic data.

The yield on the 10-year Treasury note TMUBMUSD10Y, 3.606% edged up one basis point to 3.616%, while the dollar was steady. European stocks SXXP, +0.96% also traded higher.