US pre-open: Stocks set for muted open as investors await payrolls

US futures pointed to a fairly muted open on Wall Street, with investors likely to err on the side of caution ahead of the nonfarm payrolls report.

At 1140 BST, Dow Jones Industrial Average and Nasdaq futures were up 0.1%, while S&P 500 futures were flat.

At the same time, oil prices pushed higher. West Texas Intermediate was up 0.9% at $43.55 a barrel and Brent crude was 1% firmer at $45.88.

The main focus on Friday will be on the payrolls, particularly after Federal Reserve Chair Janet Yellen said last week that a move on interest rates would be dependent on upcoming data.

David Morrison, senior market strategist at SpreadCo, said: “Today’s nonfarm payrolls release has taken on particular importance as it is the last big US employment update before the Fed’s FOMC meeting on later this month.

“This meeting has itself gained in significance since Janet Yellen’s speech last Friday when she said the case for raising the fed funds rate had strengthened over the last few months. This has led to speculation that the US central bank may take the opportunity to hike rates at this meeting rather than holding off until December. If we get a strong payroll number - say, 180,000 or above - then this would strengthen the argument for monetary tightening later this month.”

Morrison said a poor number, around 140,000 or below, would effectively kill off all speculation of a September hike. Anything in between would likely lead to another three weeks of uncertainty, although it seems more likely that the Fed would hold back from raising rates ahead of the US Presidential Election, he said.

The unemployment rate is expected to have ticked down to 4.8% in August from 4.9% the month before.

On the company front, Lululemon Athletica was under pressure in pre-market trade following mixed second-quarter earnings late on Thursday and at tepid forecast for the third quarter.

Gun maker Smith & Wesson was higher in pre-market trade after reporting better-than-expected earnings on Thursday.

Hewlett Packard was likely to be in focus following a report the company could be looking for a buyer of its software business.

The payrolls report is at 1330 BST along with the unemployment rate and trade balance figures. Durable goods orders are at 1500 BST.