Futures muted as investors await economic data

By Johann M Cherian and Purvi Agarwal

(Reuters) – U.S. stock index futures were flat on Thursday ahead of a series of economic data as investors scoured for clues to determine the size of the Federal Reserve’s interest rate cut that is expected later this month.

The S&P 500 and the tech-heavy Nasdaq closed lower for the second straight session on Wednesday after a drop in job openings in July and a Fed survey fanned worries of slowing economic activity.

Traders’ bets for a 25-basis point reduction in interest rates at the Fed’s September meeting stand at 57%, according to the CME Group’s FedWatch Tool. Bets for a larger 50-bps cut rose to 43% from 34% a week earlier.

“The worry is that the Fed has waited too long to loosen monetary policy, and now runs the risk of contributing to a hard, rather than a soft landing,” said David Morrison, senior market analyst at Trade Nation.

September has been historically weak for U.S. equities, with the benchmark index down about 1.2% for the month on average since 1928.

Worries that a cooling labor market could mean a looming recession have added to the sense of caution, with the benchmark S&P 500 down more than 2% so far this week and tech stocks falling nearly 5%.

Late on Wednesday, voting member and San Francisco Fed President Mary Daly said lower borrowing costs were needed for a healthy labor market.

Focus will be on the ADP National Employment Report and weekly jobless claims, in the run-up to Friday’s crucial non-farm payrolls data from the Labor Department.

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 for Supply Management survey, due at 10 a.m. ET, is expected to show non-manufacturing activity in August stood at 51.1.

At 07:21 a.m., Dow E-minis were up 19 points, or 0.05%, S&P 500 E-minis were up 0.75 point, or 0.01%, and Nasdaq 100 E-minis were down 26.75 points, or 0.14%.

Nvidia edged up 0.5% in premarket trading, after falling more than 11% during the past two sessions. The AI chip firm said on Wednesday it did not receive a U.S. Justice Department subpoena.

Tesla rose 2.5% after the electric-vehicle maker said it will launch the full self-driving advanced driver assistance software in the first quarter next year in Europe and China, pending regulatory approval.

C3.ai tumbled 19% after the AI software firm missed quarterly subscription revenue estimates.

Frontier Communications dropped 10%. Verizon said it would buy the company in an all-cash deal worth $20 billion.

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JetBlue Airways jumped 5.8% after the carrier raised its third-quarter revenue forecast.

Leading up to the U.S. presidential elections, Goldman Sachs analysts said Democratic presidential candidate Kamala Harris’ proposed corporate tax hike could lower earnings for companies on the S&P 500 index by about 5%, while Republican candidate Donald Trump’s proposed relief would boost earnings by about 4%.

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