US pre-open: Stocks seen lower as investors eye employment data

US futures pointed to a muted opening on Wall Street as investors eyed key employment data and the prospect of a rate hike next week.

Having retreated for a second session as stocks tumbled on US President Donald Trump firm line on healthcare, on Tuesday morning at just after 1100 GMT the Dow Jones Industrial Average, S&P 500 and Nasdaq futures were all flat.

Crude oil prices were lower, with West Texas Intermediate was down 0.79% to $52.72 a barrel and Brent crude 0.63% weaker at $55.57.

Wednesday is set to be a busy day on the data front and could contain a couple of surprises for the dollar, analysts at Monex Europe said, especially with 10 year treasury yields remaining near the important 2.5% level.

The dollar was up 0.44% against the pound to 0.8232, rose 0.12% versus the euro to 0.9475 and 0.09% higher against yen to 114.08.

As investors bet the Fed will hike rates at its meeting on 14-15 March, analysts said investor focus will shift to the release of the non-farm payrolls report at the end of the week for signs of continued growth, with the US economy expected to have added 186,000 jobs last month.

The US ADP employment change coming might provide a sneak preview to Friday’s almighty non-farm payroll report, Rabobank said.

"The non-farm payroll data has added significance since a March rate hike is essentially priced in with only the non-farm payroll standing in the way of a hike.

“If this all feels somewhat like a déjà vu, you are correct since we had a similar situation last year with markets instead primed for a June hike. Yet that time the non-farm payroll report in early June threw a massive spanner in the carefully calibrated (Fed) works. Surely such an unanticipated event cannot happen again, can it? If it’s any consolation, this time around a March rate hike is only 98% priced in.”

ADP’s estimate of non-farm payrolls will be released at 13:15 GMT, followed by revised unit labour costs and non-farm productivity data for Q4 2016 at 13:30 GMT. January wholesale inventories will be out at 15:00.

On the corporate front, health stocks could be in focus again as investors digest the Republican party’s plans to dismantle the Affordable Care Act, commonly known as Obamacare.

Nvidia was up 1.1% in the pre-market after the tech firm said that it plans to put artificial intelligence into many different products beyond self-driving cars.

Dick’s Sporting Goods slumped 8.61% in pre-market trade after the retailer said it cut about 20% of its vendors and took a $46m right down.

Vera Bradley and Hovnanian Enterprises are to report earnings before the opening bell.