U.S. stock futures slipped on Thursday as investors remained cautious ahead of September’s payroll report. The data could provide critical insight into the health of the U.S. labor market. Geopolitical tensions in the Middle East are also weighing on investor sentiment.
Iran’s missile attack on Israel and the potential for a ground operation in Lebanon have sparked fears of further instability in the region. Major U.S. indices are now on track for weekly losses as October’s volatility continues. The Nasdaq Composite has been hit the hardest, down more than 1% for the week.
The Dow Jones Industrial Average and S&P 500 have lost 0.5% and 0.3%, respectively. Levi Strauss & Co. saw its shares plunge 10% in after-hours trading following a mixed fiscal third-quarter report.
The company posted adjusted earnings of 33 cents per share on $1.52 billion in revenue, narrowly beating earnings expectations but missing the $1.55 billion revenue forecast. Levi’s also trimmed its full-year guidance, reflecting struggles with its Dockers brand, which saw a 15% sales drop. While Levi’s brand grew 5% during the quarter, stagnant overall sales have shaken investor confidence.
The tech sector continues to show mixed results this week.
Market volatility with job report looming
Nvidia gained over 1% following comments from CEO Jensen Huang about “insane” demand for the company’s next-generation AI graphics processor, Blackwell.
In contrast, Wolfspeed shares dropped nearly 5% after Mizuho downgraded the stock to “underperform” from “neutral.” The firm cited concerns over pricing pressures in the silicon carbide market, a key material in electric vehicle semiconductors. Energy stocks have outperformed, benefiting from rising oil prices driven by Middle East tensions. The SPDR Energy Select Sector (XLE) is up more than 4% for the week, on track for its best week since January.
U.S. crude oil futures rose another 1.5% Thursday, pushing the weekly gain to 4.6%, as supply concerns mount amid the geopolitical unrest. Wall Street’s focus is also shifting toward upcoming labor market data, with Thursday’s and Friday’s reports being pivotal. Analysts are looking for signs of labor market weakness that could push the Federal Reserve to continue its rate-cutting cycle.
The September payroll report will likely set the tone for trading. Stronger labor data could temper the Fed’s pace of rate cuts, potentially weighing on the markets. In the short term, the market is expected to remain volatile, with tech stocks likely to stay under pressure amid rising rates and mixed earnings.
Energy stocks may continue to provide support as oil prices rise, but much will depend on Friday’s jobs report. A weaker-than-expected labor market could trigger more aggressive rate cuts, providing a short-term boost to equities. Conversely, stronger data could reinforce the Fed’s cautious approach, putting further downward pressure on stocks.
Traders should prepare for continued volatility, particularly in tech and energy sectors, as geopolitical risks and economic data unfold.
