HG MARKETS:

S&P and Nasdaq futures rose on Friday, supported by signs of a cooling U.S. labor market, which strengthened expectations of a Federal Reserve interest rate cut later this month. Investor focus was firmly on the upcoming nonfarm payrolls report, due Friday morning, for clearer signals on employment trends. Positive corporate earnings also lifted sentiment. Broadcom Inc (NASDAQ:AVGO) surged over 8% in premarket trading after posting strong quarterly results. Samsara (NYSE:IOT) jumped more than 10% on solid earnings, while DocuSign (NASDAQ:DOCU) gained nearly 8%.

Wall Street had closed higher in the prior session, with the S&P 500 hitting a new record close. Driving sentiment was softer labor data, which reinforced bets that the Fed will lower interest rates during its upcoming policy meeting. Recent data showed a slowdown in private-sector hiring and a higher-than-expected increase in jobless claims — both seen as signs of a cooling labor market.

Stocks had begun September on a weak note due to uncertainty over legal challenges to former President Donald Trump’s broad import tariffs and efforts to remove a Federal Reserve governor. Global fiscal concerns and rising debt levels also triggered a brief sell-off in government bonds, adding to market caution.

The August nonfarm payrolls report is set for release on Friday. Job growth in the U.S. is expected to have remained sluggish, further fueling market expectations of a rate cut at the Fed’s September meeting. Economists forecast that the Labor Department’s report will show an addition of 75,000 jobs in August, slightly above July’s 73,000. The unemployment rate is expected to rise to 4.3% from 4.2%, while average hourly earnings growth is projected to remain steady at 3.7%.

Analysts believe that a weak or underwhelming report could virtually guarantee a Fed rate cut at its September 16–17 meeting. According to the CME FedWatch Tool, markets have nearly fully priced in a 25-basis point rate cut, which would bring the target range down from 4.25%–4.5%. Fed policymakers are under pressure to balance both sides of their dual mandate: stabilizing inflation and maximizing employment. However, recent Fed commentary has hinted that the labor market may now be the central focus.

Lowering interest rates is intended to stimulate business spending and hiring, especially in an environment of uncertainty caused by trade tensions — though it may carry the risk of reigniting inflationary pressures.