Stock futures higher with jobs data in focus after debt-ceiling hurdle cleared

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U.S. stock futures pointed to a higher open for Wall Street on Friday after a debt-ceiling bill cleared a final hurdle, and as investors turned their attention to jobs data that could help cement a pause in Federal Reserve interest-rate hikes.

How are stock-index futures trading?

  • S&P 500 futures
    ES00,
    +0.35%

    rose 14.25 points, or 0.3%, to 4,242

  • Dow Jones Industrial Average futures
    YM00,
    +0.41%

    rose 141 points, or 0.4%, to 33,244

  • Nasdaq-100 futures
    NQ00,
    +0.27%

    rose 32 points, or 0.2%, to 14,503

On Thursday, the S&P 500 
SPX,
+0.99%

 advanced by 41.19 points, or 1%, to end at 4,221.02, the highest settlement since Aug. 19, according to Dow Jones Market Data. The Dow Jones Industrial Average 
DJIA,
+0.47%

rose 153.30 points, or 0.5%, to finish at 33,061.57, and the Nasdaq Composite 
COMP,
+1.28%

added 165.70 points, or 1.3%, to 13,100.98, the highest close since Aug. 16.

What’s driving markets?

Markets were breathing a sigh of relief after the U.S. Senate voted through a crucial debt-ceiling bill, allowing it to clear a final big hurdle late Thursday. The Fiscal Responsibility Act, which will raise the ceiling for federal borrowing and avert a disastrous government default, is now on its way to to President Joe Biden’s desk to be signed into law.

The next set of jitters, though, may come from an expected flood of Treasury bill issuance as the government tries to rebuild its coffers that have been drained by the weeks-long standoff. Some analysts have warned of a potential liquidity squeeze that could trigger volatility for markets.

But investors have enough to keep them busy in the near term, with nonfarm payroll data, due at 8:30 a.m. Eastern. The U.S. is expected have added 180,000 jobs in May, down from 253,000 in the prior month, according to economists polled by The Wall Street Journal. That would mark the second-smallest increase this year.

Private-sector payroll data released earlier this week showed stronger-than-expected hiring, while weekly jobless claims indicated no signs of big layoffs. The unemployment rate and hourly wages will be released at the same time as nonfarm payrolls.

The fresh jobs data also comes a day after reports on construction and manufacturing supported the picture of a continued slowing in the economy, even amid healthy jobs growth. The data fueled a stock rally on Thursday as it inspired hopes that the Fed will leave interest rates on hold after its two-day policy meeting wraps up June 14.

“The Fed clearly sends a message that they no longer see urgency in hiking the rates, while also letting investors know that their job fighting inflation is not done just yet. That’s a way of managing market expectations: pausing rate hikes, without however letting the market conditions loosen due to excess dovish speculation,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank, in a note to clients.

Elsewhere, Asian markets rallied on news of the debt-ceiling deal agreement, with the Hong Kong Hang Seng
HSI,
+4.02%

up nearly 4%, after skirting bear-market territory earlier this week, following sluggish China economic data.

The yield on the 10-year Treasury note
TMUBMUSD10Y,
3.613%

edged up one basis point to 3.616%, while the dollar was steady. European stocks
SXXP,
+0.76%

also traded higher.

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