By Peter Nurse
Investing.com - U.S. stocks are set to mostly rebound Friday after the previous session’s sharp losses, although the tech sector remains weak ahead of the release of the important monthly employment report.
At 7:10 AM ET (1110 GMT), S&P 500 Futures traded flat, the Dow Futures contract rose 83 points, or 0.3%, while Nasdaq 100 Futures underperformed, after dropping 108 points, or 0.9%.
The Dow Jones Industrial Average closed Thursday down 2.8%, the S&P 500 fell 3.5% and the Nasdaq Composite posted a 5% drop. These indexes are on course for their worst week since mid-June.
The biggest names in technology were also the hardest hit Thursday after the sector’s prolonged bull run. Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), Facebook (NASDAQ:FB) and Alphabet (NASDAQ:GOOGL) all finished Thursday with big losses.
The change in stance by the Federal Reserve regarding inflation, implying an easy-money policy for the foreseeable future, has helped power the stock market forward, but recent economic releases have pointed to a patchy recovery.
“High-frequency data suggests that the post-reopening surge in activity began to moderate in July and this process continued throughout August,” said ING’s James Knightley, in a research note.
“With the pandemic continuing to create many challenges, we doubt the economy will fully heal before 2022.”
With this in mind, investors will look closely at the U.S. jobs report, due at 8:30 AM ET (1230 GMT), which is expected to show job growth slowed further in August.
Nonfarm payrolls are seen rising by 1.4 million jobs last month, compared with 1.763 million in July and its growth peak of 4.791 million in June.
Employment would still be about 11.5 million below its pre-pandemic level, and the slowing growth could add pressure on U.S. policymakers to restart stalled negotiations for another fiscal package.
Meanwhile, a World Health Organization spokeswoman said on Friday it does not expect widespread vaccinations against Covid-19 until the middle of next year.
In corporate news, the focus will remain on the tech sector after it had its worst day for over four months. That said, since March 23, the S&P 500 tech sector is still up about 70%.
Oil prices rebounded Friday after worries over a slow pickup in demand amid ample fuel supplies.
By 6:35 AM ET, U.S. crude futures were up 0.9% at $41.72 a barrel, while Brent futures, the international benchmark, were up 0.7% at $44.36 a barrel.
Baker Hughes’ weekly rig count data will round off the week at 1 PM ET.
Elsewhere, gold futures rose 0.4% to $1,944.55/oz, while EUR/USD traded 0.1% lower at 1.1846.