Stock futures flat as investors digest Fed minutes, look forward to Labor data

Traders work on the floor of the New York Stock Exchange (NYSE) on November 11, 2022 in New York City.

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Stock futures were flat on Thursday as investors looked beyond a flurry of Federal Reserve meeting minutes released in the afternoon toward labor data coming later this week.

Futures tied to the Dow Jones Industrial Average declined only 11 points. Both S&P 500 and Nasdaq 100 futures were marginally lower.

Traders focused on a mixed bag of economic data as the moves followed a choppy trading session.

November’s Job Openings and Labor Turnover, or JOLTS, report showed the job market remains strong, fueling concerns that the Fed may continue to raise interest rates as long as there remains a hot market for workers . But the ISM Manufacturing Index showed the sector was contracting after 30 months of expansion, which investors saw as a positive indicator that previous rate hikes were having the intended effect of cooling the economy.

Meanwhile, minutes of the Fed’s December meeting showed the central bank remained committed to higher interest rates for “some time”.

Keith Buchanan, portfolio manager at GLOBALT Investments, said investors have “wounds that are still fresh” after 2022, which has brought the worst year for the stock market since 2008. He said investors are trying to balance each new piece of economic data or Fed commentary with broader concerns about the future.

“Every day that passes and we get a data point that’s moving in the right direction, it’s positive,” Buchanan said. “But it also quickly gives a sense of how sensitive and fragile this moment is.”

Investors will watch Thursday for more data on jobs, the trade deficit and business activity. Fed Speakers Raphael Bostic and James Bullard are both also set to speak.

On Friday, investors will review data on non-farm payrolls, the unemployment rate and hourly wages. Since the report could have a major impact on the Fed’s next steps, it has the potential to sway the market. Investors don’t want to see big gains in wage growth.

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