Dow Futures are showing a slight increase as investors prepare for the upcoming release of crucial U.S. employment data while evaluating the fluctuations in the global bond market. The U.S. economy is expected to have experienced a decline in job additions for September relative to the previous month, with the unemployment rate anticipated to match that of August. Fluctuations in the bond market continue to attract attention, while equities managed to secure modest gains on Thursday after a volatile trading session. Elsewhere, Nike shares have experienced a decline of over 8% in after-hours trading, following a revenue outlook that has disappointed investors in the athletic apparel sector.
Dow futures indicated an upward trajectory on Friday. By 03:16, the Dow futures contract had increased by 137 points, or 0.3%, the S&P 500 futures had gained 20 points, or 0.3%, and the Nasdaq 100 futures had progressed by 129 points, or 0.4%. The primary indices on Wall Street recorded modest gains in the previous session, as an initial downturn in the debt markets subsided, resulting in a decrease in yields that positively influenced stock performance. Quarterly results from chipmaker Micron also stimulated equities. The group provided robust guidance, with executives indicating that the supply and demand dynamics for memory chips will be significantly more constrained in the upcoming two fiscal years relative to the 2026 financial period.
Attention now shifts to the U.S. nonfarm payrolls report for September, which is expected to shed light on the condition of the American labour market amid heightened inflationary pressures. The U.S. economy is projected to have added 89,000 jobs last month, compared to 162,000 in August. The unemployment rate is projected to remain at 4.1%, consistent with August’s figures. “Clearly, the monthly jobs reports are always a macro highlight, but this is an important one, as the continued data resilience has been a huge factor supporting U.S. risk assets,” analysts at Deutsche Bank said in a note. Ongoing solidity in economic data has provided the Federal Reserve with increased flexibility to initiate rate hikes, they noted. In theory, increasing borrowing costs can suppress inflation, although this comes with the potential downside of impacting growth and the labour market. Consequently, signs of economic robustness can enhance policymakers’ confidence that an increase in rates may not significantly impede growth. Confronted with evidence indicating persistent energy-driven inflation alongside a strong labour market, the Fed raised interest rates by a quarter of a percentage point last month.
However, numerous Fed officials have subsequently provided remarks indicating that they are not eager to re-tighten policy anytime soon. Markets are currently estimating approximately a 30% probability of a rate increase at the Fed’s October meeting, a decrease from 70% earlier this week. The dovish commentary on Thursday, along with the recalibrating rate expectations, contributed to alleviating a rout in global bonds. This rout had initially driven the benchmark U.S. 10-year Treasury yield to its highest intraday level since 2002. Ultimately, the 10-year yield experienced a decline exceeding 4 basis points, whereas the rate-sensitive 2-year recorded its most significant daily drop since July. Yields typically exhibit an inverse relationship with prices. Analysts have indicated that further selling may be on the horizon for global bonds, which could lead to higher financing costs for corporations and mortgage borrowers alike. Amid the prevailing uncertainty regarding the trajectory of the conflict in the Middle East, a surge in expenditure on artificial intelligence infrastructure persists, contributing to inflationary pressures and maintaining the possibility of additional rate hikes on the horizon.
Nike has outlined plans to reduce its workforce and restructure its global business divisions, as CEO Elliott Hill seeks to demonstrate progress in his efforts to revitalise the athletic apparel giant. An underwhelming forecast has further clouded the outlook for the company, which is contending with escalating competition, a dearth of innovative new products, and subpar performance in the vital Chinese market. Revenue is anticipated to decrease in the high single digits in fiscal 2027, contrasting with analysts’ expectations for a decline of approximately 2%, as per LSEG data. Against this backdrop, Nike stated that it was uncertain how many positions would be eliminated as part of the restructuring, but indicated that it would start informing affected employees in 2027.
Amazon is looking to divest approximately $8 billion worth of advanced Nvidia chips to external investors, according to a report on Thursday from sources familiar with the situation. Amazon engaged in discussions with investors in recent weeks to assess interest in a transaction involving the spin-off of thousands of Grace Blackwell chips into a special purpose vehicle, according to the report. The e-commerce giant will subsequently lease the advanced AI chips-currently utilised in data centers throughout the U.S.-from the vehicle, which will then engage external investors via debt issuance, according to the source. The measure is designed to enhance Amazon’s balance sheet by transferring costly chip expenses to investors and embracing a more asset-light strategy, according to the report.
