US Stock Futures Cautious On August 7 After Nasdaq, DJIA, S&P 500 Crashed; How US Nonfarm Payroll Will Impact?

US stock futures traded on a mixed note on August 7 as investors' focus shifts towards the upcoming US nonfarm payroll data on Friday. Wall Street, which broadly witnessed a strong record rally in the initial days of this week, corrected sharply on August 6 ahead of jobs data, as it will provide more clarity on the US Federal Reserve's stance in September policy.

With Friday's key job report, investors can potentially take a breath as earnings news slows. This might put more focus on the Middle East, where rumors of peace talks and a short-term deal to open the Strait of Hormuz sent crude oil and Treasury yields down again yesterday even though major indexes ended mostly lower, as per Charles Schwab market commentary note.

US Stock Futures Trade Mixed On Friday

At the time of writing, the Dow Jones Industrial Average Index futures dipped by 66 points or 0.12% to trade around 53,947. While the S&P 500 index performed flat at 7,734.75. On the contrary, the Nasdaq 100 futures traded at 29,543.00, higher by 54.75 points or 0.2%.

US stock futures were little changed on Friday as investors awaited the closely watched July jobs report for fresh signals on labor market conditions and the potential path of Federal Reserve monetary policy. In corporate news, Airbnb jumped more than 8% in extended trading after reporting stronger-than-expected revenue and earnings, while Cloudflare soared 16% on an upbeat full-year and current-quarter outlook. Meanwhile, DraftKings slipped 3% after falling short of revenue estimates, as per Trading Economics.

US Stock Market Crashed Ahead Of US Jobs Report:

Ahead of US jobs data, Wall Street faced sharp selling pressure on August 6th. The Dow Jones index dropped by 464.02 points or 0.9% to close at 53,885.10, taking the worst hit compared to other counterparts. Additionally, the Nasdaq Composite index dipped mildly by 15.09 points to end at 26,348.35. Also, the S&P 500 slipped by 13.59 points or 0.2% to finish at 7,709.96.

One of the key reasons for decline is selloffs in chip stocks. As per Schwab's note, chip stocks stumbled out of the gate, dragged by an outlook from Sandisk (SNDK) that appeared to disappoint. The chip weakness was contagious across almost the entire tech sector, creating a headwind for what had been the high-flying Nasdaq. The rest of Wall Street inched up early, buffered by reports that Iran and Oman might soon announce a deal to allow ships back through the Strait of Hormuz, though it's unclear if such a deal would satisfy the U.S.

"Global cues turned cautious overnight as the Dow Jones fell 464 points, ending its record streak, while the S&P 500 and Nasdaq Composite also closed marginally lower amid rising US Treasury yields and weaker-than-expected earnings from memory-chip makers," said Rajesh Palviya, Head of Research, Axis Direct.

Sandisk plunged 7% overnight, while major stocks like Goldman Sachs, Morgan Stanley and JP Morgan declined by 2-3%. Tesla and Alphabet stock were down by 1% each.

How US Jobs Report Will Impact Wall Street On Friday?

As per Schwab's note, all boils down to July nonfarm payrolls. Consensus is for 86,000 new jobs and steady unemployment at 4.2%. One metric to check is labor market participation, which declined recently and could indicate a tougher jobs market than the unemployment rate shows.

On the other hand, weekly initial jobless claims stood at 199,000, which is near record lows and July layoffs fell sharply from June to around 33,000, according to the Challenger job cuts report, the lowest in three years.

Hence, Friday will be crucial trading day as data such as Average Hourly Earnings, Average Workweek, Consumer Credit, Nonfarm Payrolls, and Unemployment Rate will be released.

In case of quarterly earnings, watch out for --- Almonty Industries Inc. (ALM), CG Oncology Inc. (CGON), Flour Corp. (FLR), Hawaiian Electric Industries Inc. (HE), Oklo Inc. (OKLO), Plains All American Pipeline LP (PAA), Plains GP Holdings Inc. (PAGP), PPL Corp. (PPL), Take-Two Interactive Software Inc. (TTWO), and Vistra Corp. (VST).

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