US equity futures opened modestly higher with the S&P 500 futures rising 0.1%, while Nasdaq 100 futures climbed 0.3%.
The Dow Jones Industrial Average remained relatively unchanged, as did the U.S. Dollar Index. Meanwhile, the 10-Year Treasury yield stood at 3.903% at 18:05 EST (22:05 GMT).
Focus shifts to labor market
Investors are turning their attention to a crucial week for the US markets, with high anticipation for the upcoming labor market data. The previous month’s labor report fell short of expectations, prompting a sell-off in risk assets that began with the previous day’s disappointing ISM Manufacturing PMI.
The subpar labor figures have prompted discussions regarding their cause, with Hurricane Beryl being a significant factor. Despite the Bureau of Labor Statistics (BLS) stating that the hurricane, which hit Texas during the survey week of the July employment report, had “no discernible effect” on the employment data, the household survey revealed a different impact.
It indicated that 436,000 individuals were unable to work due to adverse weather conditions, marking a record high for the month of July. Moreover, 249,000 people were reported to be on temporary layoff during the same period.
The increase in unemployment has been largely attributed to these temporary layoffs. Market participants are keen to determine if the July data was indeed influenced by such transient factors.
The Federal Reserve, which closely monitors the labor market, will use this forthcoming report to decide on the magnitude of the interest rate cut at their next meeting, with the options being either a 25 basis points (bps) or a 50-bps reduction.