US stock futures are on the rise as strong tech earnings fuel optimism ahead of the release of the monthly jobs report. By 06:30 ET, Dow Futures were up 45 points or 0.1%, S&P 500 Futures traded 15 points or 0.3% higher, and Nasdaq 100 Futures climbed 80 points or 0.5%. This comes after the benchmark Wall Street indices closed lower on Thursday, taking a breather after significant gains in July, with surging bond yields weighing on the market.
The tech sector has been performing well, driven by the promise of artificial intelligence and hopes that the Federal Reserve will halt its interest rate increases sooner rather than later. Investors are now eagerly awaiting the monthly jobs report, which is expected to show that 200,000 new positions were created in July, indicating a slight slowdown compared to the previous month. Despite this deceleration, the labor market is projected to remain robust, with the unemployment rate expected to stay unchanged at 3.6%.
While quarterly earnings are still being reported, the peak has passed. According to FactSet, around 79% of S&P 500 companies have already released their results, with approximately 80% surpassing Wall Street expectations. Investors are particularly interested in the earnings reports of tech giants Apple and Amazon, both of which were released after the market close on Thursday. Apple’s quarterly income exceeded expectations, driven by strong demand for its services, although revenue fell as consumer spending on Apple products declined. On the other hand, Amazon’s cloud computing division saw slower growth than expected in the second quarter, but there is hope for a turnaround in the near future.
In addition to the tech earnings, oil prices are also on the rise. The market is set for a sixth consecutive week of gains thanks to output cuts by Saudi Arabia and Russia, two of the world’s largest producers. Saudi Arabia recently extended its voluntary oil production cut of 1 million barrels per day until the end of September, while Russia has announced a 300,000-barrel-per-day cut in oil exports for next month. These reductions come ahead of a meeting of the Organization of Petroleum Exporting Countries (OPEC) and its allies, where additional cuts are unlikely to be made.
Overall, investor sentiment is optimistic as tech earnings provide a boost and the labor market remains strong. With hopes of a turnaround in the tech sector and positive developments in the oil market, market participants are eagerly anticipating the release of the jobs report and closely watching the ongoing quarterly earnings announcements.
