The Day Ahead: Will Markets React Sharply Today to Payrolls and Trade Headlines?

Futures Firm Up as Markets Brace for Pivotal Jobs Test and Tariff Fallout

U.S. stock futures ticked higher early Friday, stabilizing after a bruising session that saw the Nasdaq drop 0.83% and the S&P 500 fall 0.53%. The Dow closed off 108 points, dragged lower by a 14% collapse in Tesla shares after a public feud between Elon Musk and Donald Trump.

A contentious U.S.-China call and the start of new tariffs on steel and aluminum have refueled trade uncertainty, adding geopolitical weight to today’s tape.

Markets now await a crucial labor print that could cement—or challenge—bets on Federal Reserve rate cuts. Premarket action suggests cautious optimism, but conviction hinges on incoming data and political tone shifts.

High-Stakes Payrolls: What Matters and Why

At 12:30 GMT, the May jobs report is expected to show:

• Non-Farm Payrolls: +130,000 consensus (vs. +177,000 prior). A sharp miss could accelerate rate-cut pricing; a beat could undercut dovish assumptions.
• Unemployment Rate: Expected to hold at 4.2%. A rise would signal labor slack, supporting easing.
• Average Hourly Earnings: Forecast +0.2% m/m. Wage growth is key for inflation expectations—any surprise here could shift Fed calculus.

With recent jobless claims and ADP figures flashing softness, today’s numbers carry added market risk. Traders are laser-focused on labor market slack and wage pressures to gauge whether two rate cuts remain on the table for 2025.

Technical Outlook: Index Futures Hold Pattern Above Key Moving Averages

• S&P 500 Index futures

Holding firm above the 200-day SMA at 5,899.61 and the 50-day SMA at 5,652.30. Price remains in a tight consolidation zone after putting in higher lows at 5,596.00 and 5,756.50. Immediate resistance stands at 6,016.50, with the record high at 6,236.50 as the next upside target. A break below 5,899.61 would weaken near-term structure.

• Nasdaq 100 Index futures 

Trading above the 50-day SMA at 20,003.50 and the 200-day SMA at 20,836.41. Recent support at 20,727.00 continues to hold, while resistance at 21,935.00 remains intact. A breakout could open a path toward the next measured level at 22,656.75.

• Dow Jones Index futures

Price remains rangebound between the recent swing low at 41,236.00 and the swing high at 42,976.00. The 50-day SMA sits at 41,724.40 and the 200-day SMA at 43,122.00. A break above 42,976.00 would shift momentum higher, while a drop below 41,236.00 would expose the lower band of the multi-week range.

Pre-Market Earnings: ABM Offers a Micro Look at Labor Trends

• ABM Industries (ABM) – Before the Open
  Expected EPS: $0.87
  Watch for commentary on service-sector demand, labor cost trends, and hiring pressure across building services. The company provides a real-world read on employment and economic momentum at the ground level.

Fed Path and Trade Turbulence Keep Market Bias in Check

Today’s dual catalysts—labor data and escalating trade tensions—inject headline risk into every move. A soft jobs print would likely reinforce rate-cut momentum, but a hot report could stall easing expectations. Meanwhile, with Trump’s tariff regime shifting gears and U.S.-China talks still murky, geopolitical risk remains a live wire. As traders head into the weekend, expect volatility to stay elevated with rate and trade narratives far from resolved.

More Information in our Economic Calendar.