Wall Street edged lower Friday ahead of the release of the December jobs report, which is expected to show that the labor market remained sturdy in the final month of 2023.
Futures for the S&P 500 and the Dow Jones Industrial Average were each down 0.3% before the bell.
Economists expect the jobs report to show U.S. hiring slowed to 160,000 jobs last month from 199,000 in November, though the latter number was slightly inflated by the return of thousands of auto workers and actors who had been on strike.
The hope is that the economy will remain just strong enough to stave off recession without reversing progress in taming inflation. The Federal Reserve is watching to see if current trends continue as it weighs the possibility of cutting interest rates. The latest inflation data from the consumer and wholesale levels are due out next week.
Rate cuts give a boost to prices for stocks and other investments, while also relaxing the pressure on the economy and financial system.
“Sentiments are back on some wait-and-see, given that we may have to see a substantial weakening of the U.S. labor market to justify market pricing of a rate cut,” said Yeap Jun Rong, market analyst at IG.
In Europe, data showed that inflation rose to 2.9% in December, rebounding after seven straight monthly declines. The rise in price levels fueled debate over how soon interest rate cuts could be expected from the European Central Bank.
At midday, France’s CAC 40 declined 1.1% while Germany’s DAX slipped 0.8%. Britain’s FTSE 100 slid 0.9%.
In Asian trading, Japan’s benchmark Nikkei 225 added 0.3% to finish at 33,377.42 as major manufacturers like Toyota Motor Corp. advanced thanks to a weakening of the yen, which helps Japanese exporters by boosting the value of their overseas earnings.
The yen has weakened in recent days amid speculation that the Bank of Japan might go slowly on changing its lax policy stance as it assesses the impact of Monday’s major earthquake in central Japan. Friday in Asia, the U.S. dollar rose to 145.09 Japanese yen from 144.63 yen. The euro fell to $1.0918 from $1.0947.
Hong Kong’s Hang Seng shed 0.7% to 16,535.33, while the Shanghai Composite skidded 0.9% to 2,929.18.
Australia's S&P/ASX 200 fell 0.1% to 7,489.10. South Korea's Kospi lost 0.4% to 2,578.08.
In other trading, benchmark U.S. crude added 64 cents to $72.83 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, rose 48 cents to $78.07 a barrel.
On Thursday, Wall Street’s weak start to 2024 carried into a third day. Stocks finished mixed on Thursday following reports showing the U.S. job market remains solid, though maybe a touch too strong.
The S&P 500 slipped 0.3%, and is on track for its first losing week in the last 10. The Dow Jones Industrial Average eked out a gain of less than 0.1%, and the technology-heavy Nasdaq composite fell 0.6%.
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