By Niket Nishant and Avinash P
July 2 (Reuters) – Wall Street futures were mixed on Thursday as investors awaited the June employment report, while a lack of progress in negotiations to end the Middle East war weighed on sentiment.
Markets had a choppy session on Wednesday, with the main indexes settling lower, as Federal Reserve Chair Kevin Warsh said inflation risks had eased but committed to sticking firmly to the U.S. central bank’s 2% inflation target, vowing to “disappoint” anyone who expected a loose monetary policy.
U.S. President Donald Trump has repeatedly called for lower borrowing costs and criticized Warsh’s predecessor, Jerome Powell, for keeping rates elevated for too long.
“Markets have had a rocky start so far to Q3,” a group of Deutsche Bank analysts, led by its global head of macro research, Jim Reid, wrote in a note.
They noted, however, that there was still “a fair amount of optimism” among investors.
Traders expect at least one rate hike by the Fed this year, according to data compiled by LSEG.
Some recent data has suggested that the labor market is stable, potentially giving the central bank more leeway to hike rates to contain inflation, without risking significant fallout on employment.
Additionally, the U.S. and Iran concluded a round of indirect talks on Wednesday with no sign they had made headway toward lasting peace, adding another layer of uncertainty.
Investors will get a fresh read on the health of the labor market when the closely watched nonfarm payrolls report is released later on Thursday.
A Reuters survey of economists predicted that payrolls likely increased by 110,000 jobs last month after rising 172,000 in May.
However, some predicted that the data may be distorted because of hiring linked to the FIFA World Cup.
“As a result, markets are likely to place greater weight on the June CPI (consumer price index) report due on July 14, as inflation data will offer a cleaner read on the economy,” said Julien Lafargue, chief market strategist at Barclays Private Bank.
At 06:40 a.m. ET, Dow E-minis were up 98 points, or 0.19%, with 11,653 contracts changing hands, S&P 500 E-minis were flat and Nasdaq 100 E-minis were down 94.25 points, or 0.31%.
Several chip stocks fell in premarket trading, with SanDisk and Arm Holdings down 2.2% each, pressuring the technology-heavy Nasdaq futures.
The Philadelphia SE Semiconductor index eased 6.3% on Wednesday, right after registering its best ever quarterly performance on record with a near 88% gain.
Bending Spoons slipped 3.7% a day after the Vimeo owner gained 40% in its debut on the Nasdaq.
(Reporting by Niket Nishant and Avinash P in Bengaluru; Editing by Sriraj Kalluvila and Devika Syamnath)
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