US stock index futures moved modestly higher on Thursday after a stronger-than-expected labor market report eased fears of an economic slowdown, though investors grew more cautious about the outlook for Federal Reserve interest-rate cuts.
Markets are now focused on upcoming inflation data and corporate earnings for further direction.
The January jobs report showed payroll growth of 130,000, exceeding expectations, while the unemployment rate declined to 4.3% from 4.4%.
The figures reassured investors about economic stability but complicated expectations for monetary easing.
The S&P 500 and Nasdaq 100 futures ticked up by more than 0.25%. Dow Jones futures were up by more than 0.31% or 158 points.
The Dow ended its three-session winning run on Wednesday, while the other major indexes also finished slightly lower.
Equities had opened higher but later erased gains after nonfarm payrolls data significantly exceeded economists’ expectations.
Jobs data reshapes rate expectations
Following the employment report, traders scaled back expectations for near-term interest-rate cuts.
According to CME Group’s FedWatch tool, the probability of the Fed holding rates steady has climbed to nearly 40% from 24.8% a day earlier, though at least one rate reduction is still widely expected in June.
The next major test for markets will be the January Consumer Price Index report due Friday.
Weekly jobless claims data and other labor-market indicators are also scheduled for release, potentially shaping the policy outlook further.
Earnings and sector pressures
Corporate earnings remained a central driver of individual stock movements.
Companies reporting results before the open included Restaurant Brands, Birkenstock, Howmet Aerospace, and Exelon.
Some sectors continued to face pressure linked to artificial-intelligence disruption.
Software stocks extended losses, and brokerage firms also declined.
AppLovin shares fell 5.6% after fourth-quarter results and have lost nearly one-third of their value in the first six weeks of the year.
Cisco Systems dropped 8% in premarket trading after issuing disappointing guidance and reporting a weaker-than-expected adjusted gross margin.
Meanwhile, McDonald’s shares turned positive after an earnings beat.
Markets will also monitor remarks from Dallas Fed President Lorie Logan and Federal Reserve Governor Stephen Miran for additional policy signals.
Trade policy and geopolitical developments
Beyond economic data, trade developments also influenced sentiment.
Reports indicated the United States and China may extend their trade truce for up to a year, with Presidents Donald Trump and Xi Jinping expected to meet in Beijing in early April.
Separately, the US House of Representatives narrowly backed a measure disapproving tariffs on Canada, voting to terminate the national emergency used to impose punitive trade measures.
In corporate regulatory news, Applied Materials shares slipped 1% after the US Department of Commerce announced a $252 million settlement related to illegal exports of chipmaking equipment to China.
Overall, markets remain balanced between confidence in economic resilience and uncertainty about inflation and monetary policy, with Friday’s CPI data likely to provide the next decisive signal for investors.
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