US pre-open: Futures slip ahead of key ADP jobs report

US stock futures edged lower in pre-market trade on Wednesday as investors chose to take profits are recent gains ahead of some key data from the labour market.

Futures were pointing to a flat start for the Dow Jones Industrial Average, and a 0.1% and 0.2% fall for the S&P 500 and Nasdaq indices, respectively.

Stocks rose sharply on Tuesday – the Dow gained 0.9%, while the S&P 500 rose 1.5% and the Nasdaq jumped 1.7% – as bond yields dropped following worse-than-expected economic data.

The Conference Board's US consumer confidence index fell from 117 to 106.1 in August, well below the 116 consensus forecast, while US job vacancies fell to their lowest levels since early 2021.

"What appears to be bad news for the US economy is being notched up as good news for equities with a weakening jobs snapshot and slide in consumer confidence lifting indices," said Susannah Streeter, head of money and markets at Hargreaves Lansdown. "Signs of America’s cooling economy have raised hopes that the pause button will be pushed on punishing interest rate hikes."

Eyes will now turn to Wednesday's release by ADP of its National Employment Report at 0815 ET. The report is expected to show a dramatic cooling in the net change in private-sector jobs added, at just 200,000 in August, down from 324,000 in July and 455,000 in June.

The ADP report will be followed by official non-farm payroll figures on Friday.

Also on Wednesday, the second estimate for second-quarter GDP will be released and is expected to confirm that the US economy expanded by 2.4% between April and June.

In corporate news, computer giant HP was declining in pre-market trade after posting a third-quarter revenue figure of $13.2bn, short of the $13.4bn expected by analysts.

Salesforce earnings are due out after the closing bell.