Futures are lower as caution prevails ahead of jobs data

(Reuters) – U.S. stock index futures were flat to slightly lower ahead of a slew of economic data on Thursday, as investors looked for clues about the size of the Federal Reserve’s interest rate cut expected later this month.

The S&P 500 and the tech-heavy Nasdaq closed lower for the second straight session on Wednesday, after a decline in job openings in July and a Fed survey that stoked concerns about a slowdown in economic activity.

According to CME Group’s FedWatch tool, traders are 59% betting on a 25 basis point interest rate cut at the U.S. central bank’s September meeting. Bets on a deeper 50 basis point cut rose to 41% from 34% a week earlier.

September was a historically weak month for U.S. stocks, with the benchmark index down about 1.2% on average for the month since 1928.

Fears that a slowdown in the labor market could signal an imminent recession have added to cautious sentiment, with the benchmark S&P 500 index down more than 2% since the start of the week and technology stocks down nearly 5%.

Late Wednesday, San Francisco Fed President Mary Daly, a voting member this year, said the central bank needed to cut interest rates to keep the labor market healthy, but that it would now be up to future economic data to determine by how much.

Attention will be focused on the ADP national employment report and weekly jobless claims ahead of crucial nonfarm payroll data released by the Labor Department on Friday.

Economists expect the ADP report, due at 8:30 a.m. ET, to show private payrolls rose by 145,000 jobs in August, compared with an increase of 122,000 in July.

The Institute of Supply Management survey, due at 10 a.m. ET, is expected to show that nonmanufacturing activity in August came in at 51.1.

As of 5:32 a.m. ET, the Dow E-minis were up 24 points, or 0.06%, the S&P 500 E-minis were down 1 point, or 0.02%, and the Nasdaq 100 E-minis were down 39 points, or 0.21%.

Nvidia rose in premarket trading after falling more than 11% over the past two sessions. The AI ​​chipmaker said Wednesday it had not received a subpoena from the U.S. Justice Department.

Tesla rose 2.3% after the electric vehicle maker said it would launch fully autonomous driving assistance software in the first quarter of next year in Europe and China, pending regulatory approval.

Other rate-sensitive growth stocks, such as Meta, Alphabet and Apple, were flat to slightly lower.

C3.ai fell 18.8% after the AI ​​software company missed estimates for quarterly subscription revenue as companies cut spending amid economic uncertainty.

Ahead of the U.S. presidential election, Goldman Sachs analysts said Democratic presidential candidate Kamala Harris’ proposed corporate tax hike could cut profits at S&P 500 companies by about 5%, while Republican candidate Donald Trump’s proposed tax cut would boost profits by about 4%.

(Reporting by Johann M Cherian in Bengaluru; Editing by Shounak Dasgupta)