U.S. Stock Market Braces for Jobs Report Amid Volatile Trading

U.S. stock index futures experienced a mixed trading session on Thursday, with investors feeling cautious ahead of a key jobs report. Recent weaker-than-expected economic data has spurred fears of a recession. The market is closely watching weekly jobless claims data and comments from Richmond Fed President Thomas Barkin for indicators on the next moves by the Federal Reserve.

U.S. stock index futures were mixed on Thursday as investors turned cautious ahead of a crucial jobs report. This follows last week's weaker-than-expected economic data, which raised fears of an impending recession.

Most megacap and growth stocks showed volatility in premarket trading. The Nasdaq had closed 1% lower in the previous session due to a retreat in tech stocks after a brief rebound, influenced by weak demand in a 10-year Treasury auction. Global markets have seen increased volatility this week, driven by gloomy economic reports and the unwinding of currency carry trade positions, leading to a rise in the Japanese yen following the Bank of Japan's rate hike on July 31.

Attention has shifted to U.S. weekly jobless claims data, released at 8:30 a.m. ET. This is anticipated to show a slight decrease in Americans claiming State unemployment benefits for the week ending August 3. "U.S. weekly jobless claims will be very sensitive given market positions expecting the Federal Reserve to cut rates aggressively by year-end," said Marc Ostwald, chief economist & global strategist at ADM Investor Services.

J.P.Morgan has increased the probability of a U.S. recession by the end of this year to 35% from 25%, noting reduced labor market pressures. Money markets currently forecast a 71.5% chance of a 50-basis-points rate cut by the Federal Reserve in September, with potential for two more cuts by the end of 2024, according to CME's FedWatch Tool.

Richmond Fed President Thomas Barkin's comments at 3 p.m. ET will be closely followed for signals about the U.S. central bank's next move. By 6:45 a.m. ET, Dow E-minis were down 90 points (0.23%), S&P 500 E-minis were down 9.25 points (0.18%), and Nasdaq 100 E-minis were up 11.5 points (0.06%).

The CBOE Market Volatility Index, known as Wall Street's "fear gauge," rose to 28.51 points from Wednesday's low of 21.97. Earnings reports have been mixed: Bumble slashed its annual revenue growth forecast, sending its shares down 39.7%; Warner Bros Discovery fell 12.3% after writing down TV asset values; Monster Beverage dropped 8.3% due to disappointing Q2 sales; while Robinhood gained 1.5% and Eli Lilly surged 7% on upbeat earnings and a strong outlook for its weight-loss drug Zepbound.

(With inputs from agencies.)