U.S. index futures suggest a nearly static start on Friday, hinting at a continuation of the subdued activity observed in the previous session. Following the Labor Department's closely monitored employment report for January, some volatility in futures was noted.
The report revealed January employment gains were below expectations, but the unemployment rate unexpectedly decreased slightly. Specifically, non-farm payrolls added 143,000 jobs in January, following a robust upward revision to 307,000 jobs in December. Economists had anticipated an increase of 170,000 jobs compared to the initial 256,000 jobs reported for December.
Job growth was recorded in the healthcare, retail, and social assistance sectors, partially counterbalanced by declines in mining, quarrying, and oil and gas extraction. The unemployment rate dipped to 4.0 percent from December's 4.1 percent, contrary to predictions of stability.
This mixed data could introduce uncertainty regarding interest rate forecasts, prompting some traders to remain cautious. Later in the trading day, the University of Michigan will release its preliminary February consumer sentiment reading, anticipated to rise to 72.0 from January's 71.1. The report will also present inflation expectations, which could further influence interest rate projections.
Thursday’s trading exhibited a lack of clear direction, with major indices fluctuating before ending with varied results. Both the Nasdaq and S&P 500 achieved session highs by the close, marking their third consecutive day of gains. The Nasdaq increased by 99.66 points, or 0.5 percent, to 19,791.99, and the S&P 500 rose 22.09 points, or 0.4 percent, to 6,083.57, while the Dow declined by 125.65 points, or 0.3 percent, to 44,747.63.
Wall Street's hesitant trading was attributable to anticipation of the Labor Department's imminent monthly employment report. Ahead of this, the Labor Department noted a greater-than-expected rise in initial U.S. unemployment claims for the week ending February 1, climbing to 219,000 from the prior week's revised level of 208,000, against forecasts of 213,000.
An additional report indicated that U.S. labor productivity and unit labor costs rose less than anticipated in Q4 of 2024. Most key sectors experienced only slight shifts, contributing to the stock market's tepid performance overall. However, banking stocks showed significant strength, with the KBW Bank Index reaching its highest closing level in nearly two years, rising by 1.5 percent. Computer hardware stocks also performed robustly, as evidenced by the NYSE Arca Computer Hardware Index's 1.3 percent gain. Steel stocks showed strong results as well, contrasted by a downturn in energy stocks, leading to a decline in both the NYSE Arca Oil Index and the NYSE Arca Natural Gas Index by 1.6 percent and 1.5 percent, respectively.
**Commodity and Currency Markets**
Crude oil prices have increased by $0.50, reaching $71.11 per barrel, following a $0.42 decline to $70.61 per barrel on Thursday. Gold futures, after dropping $16.30 to $2,876.70 per ounce in the previous session, have edged up by $6.80, reaching $2,883.50 per ounce.
In currency markets, the U.S. dollar is currently exchanging at 151.81 yen, up from 151.41 yen at Thursday’s New York close. Against the euro, the dollar stands at $1.0369, compared to $1.0383 in the previous session.
**Asia**
Asian markets concluded with mixed results on Friday. Mainland Chinese and Hong Kong markets experienced notable gains, driven by DeepSeek AI's positive impact on tech stocks. In contrast, other regional markets remained subdued following Amazon's disappointing first-quarter revenue forecast and as investors await U.S. President Donald Trump's upcoming trade decisions ahead of China's impending tariff deadline.Investors are keenly anticipating the latest U.S. employment report and preliminary indicators of consumer sentiment and inflation expectations for February, which will offer crucial insights into the Federal Reserve's forthcoming interest rate decisions.
Projections suggest that U.S. employment may have increased by 170,000 jobs in January, following a rise of 256,000 jobs in December, with the unemployment rate expected to remain at 4.1%.
The yen reached a nine-week peak against the U.S. dollar after Tamura, a Bank of Japan board member, proposed raising interest rates to a minimum of 1% by the close of the fiscal year 2025.
In a separate development, the International Monetary Fund advised Japan to remain alert to possible repercussions from escalating global market volatility.
Gold is on track for its sixth consecutive weekly increase, spurred by uncertainties surrounding Trump's tariff policies, fueling a demand for gold as a hedge by central banks and investors. Conversely, oil prices are poised for a third straight week of declines, driven by fears of an oversupply.
China's Shanghai Composite Index rose by 1.0% to 3,303.67, and Hong Kong's Hang Seng Index surged by 1.2% to 21,133.54, led by strong gains in technology stocks.
Japanese markets experienced notable declines as the yen strengthened for the fifth consecutive day. The Nikkei 225 Index dropped by 0.7% to 38,787.02, while the broader Topix Index fell by 0.5% to 2,737.23.
U.S. President Donald Trump is set to meet Japanese Prime Minister Shigeru Ishiba for the first time, amidst concerns over China's expanding military influence and the evolving global power dynamics.
In Seoul, stocks ended a three-day winning streak, with battery and automotive sectors underperforming, causing the Kospi to decrease by 0.6% to 2,521.92.
Hyundai Rotem surged by 11.3% following optimistic earnings projections by a local brokerage for this year in the defense equipment sector.
Australian markets closed slightly lower, impacted by drops in gold and energy stocks. The benchmark S&P/ASX 200 Index slipped 0.1% to 8,511.40, while the broader All Ordinaries Index ended marginally down at 8,780.30.
Across the Tasman Sea, New Zealand's S&P/NZX 50 Index closed up 0.5% at 12,902.19.
**Europe**
On Friday, European shares edged lower, retracting from the previous day's record highs fueled by strong quarterly earnings and diminished fears of a U.S.-led trade war.
Germany's industrial production fell significantly by 2.4% in December, marking the largest decline in five months, particularly in the automotive sector, against a predicted 0.6% decline by analysts.
In the UK, house prices increased more than anticipated in January, reaching a new high as buyer demand rose ahead of a stamp duty hike in April, according to mortgage lender Halifax. Prices grew by 0.7% from December, reversing a 0.2% decline from the previous month, surpassing economists' 0.4% growth forecast, while annual price growth slowed to 3.0% from December's 3.4%.
The German DAX Index fell by 0.1%, whereas France's CAC 40 Index and the UK's FTSE 100 Index both decreased by 0.3%.
Shares of Iveco Group NV surged following news of a potential spin-off of its defense division.
Denmark's leading bank, Danske Bank, rose sharply on reporting robust fourth-quarter results for 2024.
Legal & General saw significant gains after announcing the $2.3 billion sale of its U.S. protection arm to Meiji Yasuda Life Insurance Company.
Henkel, the German consumer goods company, also experienced a rise in share value upon declaring plans to sell its North American retailer brands to an affiliate of First Quality Enterprises.
Conversely, shares in Ashmore, a specialist in emerging markets, fell due to a reported 33% drop in its half-year profit.
**U.S. Economic News**
The Labor Department reported on Friday a less-than-expected rise in U.S. employment for January, although it unexpectedly revealed a slight dip in the unemployment rate.
This closely-watched report indicated non-farm payroll employment grew by 143,000 jobs in January, following an upwardly revised increase of 307,000 jobs in December. Economists had predicted an employment growth of 170,000 jobs, compared to the originally reported 256,000 jobs for the prior month.
The unemployment rate unexpectedly decreased to 4.0% in January from December's 4.1%, which was anticipated to remain unchanged.Federal Reserve Board Governor Michelle Bowman is set to address bank regulation at the 2025 Wisconsin Bankers Association Bank Executives Conference at 9:25 AM ET.
At 10:00 AM ET, the University of Michigan is scheduled to publish its preliminary February consumer sentiment reading. The index is forecasted to rise slightly to 72.0, following a decline to 71.1 in January.
Simultaneously, the Commerce Department will release its December report on wholesale inventories, which are anticipated to shrink by 0.5%.
At noon ET, Federal Reserve Board Governor Adriana Kugler will speak on "Entrepreneurship and Aggregate Productivity" at the 2025 Miami Economic Forum.
Lastly, the Federal Reserve's report on consumer credit for December will be available at 3:00 PM ET, projecting an increase of $16.0 billion, reversing the unexpected $7.5 billion drop in November.
