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U.S. Stock Futures Steady as Strong Jobs Data Clouds Fed Rate Cut Outlook

U.S. Stock Futures Steady as Strong Jobs Data Clouds Fed Rate Cut Outlook. Source: Carlos Delgado, CC BY-SA 3.0, via Wikimedia Commons

U.S. stock futures were little changed Wednesday evening following a muted session on Wall Street, as investors weighed a stronger-than-expected jobs report that dampened expectations for near-term Federal Reserve rate cuts. Market participants are now turning their attention to upcoming inflation data for further direction.

By 8:04 p.m. ET, S&P 500 futures edged up 0.1% to 6,963.75, Dow Jones futures gained 0.1% to 50,228.0, while Nasdaq 100 futures slipped 0.1% to 25,262.75. The modest moves came after major U.S. indexes closed nearly flat in regular trading. The S&P 500 ended unchanged, the Dow Jones Industrial Average fell 0.1%, snapping a three-day winning streak, and the Nasdaq Composite declined 0.2%.

Investor sentiment shifted after fresh labor market data showed the U.S. economy added 130,000 nonfarm payrolls in January, surpassing economist expectations. Meanwhile, the unemployment rate dipped to 4.3%, signaling continued economic resilience. While strong employment growth supports the broader economic outlook, it also reduces the likelihood of imminent interest rate cuts from the Federal Reserve. Traders have since scaled back bets on monetary policy easing in the coming months.

However, revisions to prior months’ data pointed to softer underlying job trends, suggesting pockets of weakness beneath the headline numbers. Analysts noted that outside of sectors such as leisure and hospitality, private healthcare, and government, job growth has been less consistent. This mixed picture keeps the debate over future Fed policy moves open, with some economists still forecasting potential rate cuts later this year.

Markets are now closely watching Friday’s Consumer Price Index (CPI) report, which could provide critical insight into inflation trends and shape expectations for future Federal Reserve decisions.

In corporate news, McDonald’s reported quarterly earnings that beat revenue and sales estimates, though its stock showed limited after-hours movement. Meanwhile, Cisco Systems shares fell 7% in extended trading after issuing disappointing earnings and guidance, adding pressure to technology stocks.

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