U.S. stock futures rise ahead of jobs report; oil slumps

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Investing.com - Wall Street futures pointed to a slightly higher open on Friday as investors looked ahead to the publication of the monthly employment report, while oil tumbled more than 2% on concerns of increasing U.S. shale oil production.

The blue-chip Dow futures gained 79 points, or 0.38%, at 6:42AM ET (10:42GMT), the S&P 500 futures advanced 7 points, or 0.27%, while the tech-heavy Nasdaq 100 futures traded up 21 points, or 0.36%.

The U.S. Labor Department will release its monthly nonfarm payrolls report at 8:30AM ET (1230GMT) on Friday and experts widely believe that the results will set a rate hike by the Federal Reserve (Fed) at the meeting on June 14 in stone.

The consensus forecast is that the data will show jobs growth of 185,000 in May, following an increase of 211,000 in the previous month, while the unemployment rate is forecast to hold steady at 4.4%, its lowest level since 2007.

Average hourly earnings are expected to rise 0.2% from April after gaining 0.3% a month earlier, while the annualized rate is estimated to rise to 2.6%, from the prior 2.5%.

Stock markets celebrated a separate report from payroll processing firm ADP out Thursday that said non-farm private employment rose by a seasonally adjusted 253,000 in May, above forecasts for an increase of 185,000.

Most experts believe that only a truly "catastrophic" report would stop the Fed from raising rates in two weeks' time, while markets put the odds at around 87%, according to Investing.com's Fed Rate Monitor Tool.

Philadelphia Fed president Patrick Harker will be the first central bank official with an opportunity to comment on the employment numbers in a speech scheduled for 12:45PM ET (16:45GMT). The hawkish Fed member already said at the end of May that a hike in June was a "distinct possibility" and that a total of three hikes this year would be appropriate.

Another hawk, Dallas Fed president Robert Kaplan will also be speaking at 1:00PM ET (17:00GMT). Kaplan recently affirmed that his base case continued to be for two more increases the rest of the year.

Ahead of the employment report, the dollar was relatively unchanged against major currencies on Friday.

Gold however slipped around 0.3% as investors exited the safe haven asset as risk-on sentiment reared its head with global stocks hitting record highs.

Asian markets moved to their best levels in more than two years thanks to Thursday's upbeat data on U.S. manufacturing and employment and Japan's Nikkei past the 20,000 point mark for the first time since 2015.

European stocks registered solid gains with the benchmark Euro Stoxx 50 and Germany's DAX up more than 1%. London's FTSE showed more cautious gains of 0.3%, as the British benchmark hovered just below new record highs hit in early trading Friday.

Meanwhile, oil prices fell 2% on Friday as U.S. President Donald Trump's decision withdraw from the 2015 Paris Agreement to fight climate change prompted speculation of a further acceleration in U.S. drilling, sparking further worries over the global supply glut.

Drilling activity stateside has been steadily increasing in the States with Baker Hughes' data showing last week that U.S. drillers had added rigs for the 19th week in a row, the second-longest such streak on record, implying that further gains in domestic production are ahead.

The oil services provider will release its most recent data at 1:00PM ET (17:00GMT).

U.S. crude futures sank 2.46% to $47.17 by 6:48AM ET (10:48GMT), while Brent oil tumbled 2.41% to $49.41.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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