US Stock Futures: Sideways-to-Lower as Major Players Move to Sidelines Ahead of Friday’s NFP Report

The major U.S. stock Indexes are trading flat-to-lower in Monday’s pre-market session as investors continued to assess the impact of Federal Reserve Chairman Jerome Powell’s speech on Friday, while preparing for the final trading days of August and next Friday’s U.S. Non-Farm Payrolls report.

At 0:34 GMT, September E-mini S&P 500 Index futures are trading 4503.75, up 1.75 or +0.04%. September E-mini Dow Jones Industrial Average futures are at 35376, down 27 or -0.08% and September E-mini NASDAQ-100 Index futures are trading 15431.00, up 4.50 or +0.03%.

The early price action suggests the relief rally fueled by Powell’s speech on Friday may be fizzling out with many investors already hunkering down ahead of Friday’s release of August job numbers that could influence Fed policy at its late September meeting. Economists polled by Dow Jones expect 750,000 jobs were created in August and the unemployment rate fell to 5.2%.

With only two days left in the month, investors are hoping to add to August’s modest gains. As of Friday’s close, the benchmark S&P 500 Index is up 2.6%. The blue chip Dow Jones Industrial Average and the NASDAQ Composite rose 1.5% and 3.1% this month, respectively.

Investors Hoping to Build on Powell’s Somewhat Dovish Comments

U.S. stocks rose on Friday after Fed Chair Powell signaled bond tapering could start later this year, but the central bank is in no rush to hike interest rates. The major stock indexes jumped on the news because many investors had anticipated an earlier tapering.

Powell said there had been clear progress toward maximum employment and he believed that if the U.S. economy improved as anticipated, “it could be appropriate to start reducing the pace of asset purchases this year.”

Powell’s speech showed the Chairman has not adopted the hawkish stance of some Fed officials. Based on statements from other Fed officials, a tapering announcement could come as soon as the Fed’s September 21-22 meeting. Powell said the central bank has “much ground to cover” to reach its other goal of maximum employment.

Oil Rises as Hurricane Ida Pounds Key US Crude Area

In a move that could boost energy sector shares on Monday, crude prices rose around 1% after a powerful hurricane ploughed through the Gulf of Mexico, forcing shutdowns and evacuations of hundreds of offshore oil platforms.

U.S. WTI crude oil gained 53 cents or 0.8% at $69.27 a barrel, having jumped a little over 10% over last week.