US pre-open: Stocks set for muted start ahead of ADP report

US futures pointed to a muted open on Wall Street as investors eyed the release of the ADP employment report, which is widely considered a precursor to Friday's all-important non-farm payrolls.

At 1120 BST, Dow Jones Industrial Average, S&P 500 and Nasdaq futures were all flat.

At the same time, oil prices were in the red. West Texas Intermediate was down 0.5% to $46.12 a barrel while Brent crude was 0.7% lower at $48.04.

CMC Markets’ Michael Hewson said: “While markets start to obsess again about Friday’s jobs report, given Fed vice chair Stanley Fischer’s comments yesterday, today’s ADP employment report will once again be looked at as a bellwether for this number despite the fact that there has been no correlation at all between the two reports in the last three months.

“While the ADP report has been broadly steady between 175k and 181k, between May and July, the Friday NFP report has been all over the map. Expectations for today’s August ADP report are for 173k, down from the 179k in July.”

Friday’s payrolls numbers will be watched particularly closely after Federal Reserve Chair Janet Yellen said at Jackson Hole last week that the timing of the next interest rate hike will depend on the strength of economic data in coming weeks.

In corporate news, cyber security company Palo Alto Networks was weaker in pre-market trade after it said late on Tuesday that it expected revenue and profit for the current quarter to be below analysts’ forecasts.

Technology firm Cisco Systems could be in focus after announcing late on Tuesday that it will buy ContainerX Inc.

Meanwhile, US-listed shares of Deutsche Bank were on the rise following a report it was considering a merger with Commerzbank, although DB’s chief executive dismissed the idea.

On the data front, the ADP employment report is at 1315 BST, while the Chicago purchasing managers’ index is at 1445 BST and pending home sales are at 1500 BST.