U.S. stock futures signaled a positive open on Thursday, with traders shifting focus toward a fresh round of corporate earnings and forthcoming inflation data after markets absorbed a surprisingly strong jobs report.
By 03:01 ET (08:01 GMT), futures on the major U.S. benchmarks were firmer. The Dow futures contract had climbed 143 points, or 0.3%, S&P 500 futures were up 22 points, or 0.3%, and Nasdaq 100 futures had risen by 73 points, or 0.3%.
Wall Street's main indices were subdued in the prior session as U.S. Treasury yields moved higher following the blockbuster employment reading that exceeded economists' estimates and delayed traders' expectations for the timing of the Federal Reserve's next interest rate reduction. At Wednesday's close, the Dow Jones Industrial Average had dipped 0.1% but remained above the 50,000 mark it had breached earlier in the week. The S&P 500 finished essentially flat, while the Nasdaq Composite slid 0.2%.
Individual movers and sector trends
Among individual names, Robinhood plunged 8.9% after reporting fourth-quarter revenue that fell short of expectations. Moderna's shares also eased after regulators decided not to review its new influenza vaccine. Software and brokerage stocks were generally under pressure amid concerns about potential disruption from emerging artificial intelligence tools, although losses were partially offset by a rally in chipmakers.
Payrolls and policy implications
Much of the market reaction centered on the January nonfarm payrolls release and what it signals for the economy and the Federal Reserve's path on rates. The report showed the U.S. economy added 130,000 jobs and that the unemployment rate fell to 4.3% last month.
Analysts noted that a disproportionate share of those gains came from the healthcare sector, a long-standing driver of employment given demographic pressures from a large population of older Americans. Several other areas, however, showed signs of weakening. Professional and business services posted signs of softness, a pattern some observers linked to employers recalibrating hiring and spending in response to AI-related changes in the workplace. In addition, a Trump administration push to reduce the size of the U.S. government has dented the federal workforce as well.
ING analysts pointed to sizeable downward revisions in prior months' job figures, arguing that, outside a limited set of industries, "the economy has actually been consistently losing jobs." In a note they added: "This suggests the risks remain tilted toward the Fed cutting rates more than the two reductions currently in our forecast."
Despite those caveats, the headline strength of the jobs data is widely seen as reinforcing the case for the Fed to adopt a cautious, wait-and-see stance on rate cuts for the near term. Market pricing shifted toward a later easing, with traders moving expectations for the first Fed rate reduction to the July meeting rather than June. Policymakers had already cut rates several times through 2025 in response to earlier labor-market challenges.
Cisco's margin miss and AI-driven chip pressure
On the corporate front, networking-equipment maker Cisco Systems reported an adjusted gross margin for its second quarter of 67.5%, below analysts' estimates of 68.14%, according to LSEG data cited by Reuters. The margin shortfall sent Cisco shares down more than 7% in extended trading.
Company executives said a surge in data-center spending tied to artificial intelligence workloads has strained the global supply of memory chips, lifting prices for processors used in many of Cisco's routers and switches. CEO Chuck Robbins told investors in a post-earnings call that Cisco has already raised prices and is revising customer contracts to reflect higher component costs. The company nonetheless expects continued strong demand for its systems and optics, and now projects AI-related orders to exceed $5 billion in its current fiscal year.
Peers will also report results later in the week, with Arista Networks and Applied Materials slated to release earnings after U.S. markets close on Thursday.
Precious metals and currencies
Gold and silver traded lower in European sessions as the stronger-than-anticipated payrolls report reduced the likelihood of an imminent Fed rate cut, a development that has weighed on precious metals. Nonetheless, losses were limited by persistent haven demand connected to geopolitical strains.
Futures markets were pricing in a 92.5% probability that the Fed will leave rates unchanged in March and a 79.1% chance of a similar outcome in April, according to CME FedWatch data. The robust jobs print also helped the dollar bounce overnight, exerting additional pressure on metal prices. Still, tensions between Iran and the U.S. have preserved a degree of safe-haven interest, helping precious metals retain much of this week's earlier gains.
Energy markets and geopolitical risk
Oil prices held just above break-even levels as continued friction between Washington and Tehran kept the market alert to potential supply disruptions from a major crude-producing region. Brent futures last rose 0.2% to $69.56 a barrel, while U.S. West Texas Intermediate futures gained 0.3% to $64.81 a barrel.
The two benchmarks climbed roughly 1% on Wednesday as traders priced in a higher risk premium following reports that suggested Washington was considering sending a second aircraft carrier to the region. Although U.S. and Iranian officials said there had been some progress in talks held over the weekend, there was no indication of any conclusive agreement on Tehran's nuclear activities, leaving oil markets cautious.
Looking ahead
Investors will watch upcoming corporate earnings and forthcoming inflation releases for further guidance on the economic trajectory and the timeline for Federal Reserve policy changes. Market participants remain attentive to sector-specific developments - especially in technology and semiconductors - as supply dynamics tied to AI infrastructure continue to ripple through margins and capital spending plans.
Meanwhile, the labor market's sectoral divergence - with healthcare accounting for much of the recent job growth and soft spots emerging elsewhere - leaves policymakers and investors weighing the balance between headline strength and underlying weakness in assessing the health of the economy.
Disclosure: No disclosure.