Dow futures largely flat; caution ahead of Friday's payrolls data

By Peter Nurse

Investing.com -- U.S. stocks are seen opening largely unchanged Thursday, with investors wary about the health of the U.S. economy ahead of the release of the widely-watched official jobs report.

At 07:00 ET (11:00 GMT), the Dow Futures contract was up just 2 points, S&P 500 Futures traded 2 points or 0.1% lower, and Nasdaq 100 Futures dropped 35 points or 0.3%.

The main indices closed in a mixed fashion Wednesday, with the tech-heavy Nasdaq Composite faring the worst, dropping over 1%, while the blue-chip Dow Jones Industrial Average closed 80 points or 0.2% higher.

Weak economic data this week has raised fears that the Federal Reserve's prolonged rate-hiking cycle in order to combat soaring inflation will tip the economy into a recession.

Wednesday's ADP private payrolls report was weaker than forecast, adding evidence to the idea of a cooling labor market after U.S. job openings dropped to their lowest in nearly two years in February earlier in the week.

Weekly initial jobless claims are due later in the session, ahead of Friday's official jobs report, which is released with equity markets closed for the Good Friday holiday. Analysts are expecting the economy added 239,000 jobs last month, lower than the number in February, in another sign that the numerous rate hikes are having an impact on the economy.

Cleveland Fed Bank President Loretta Mester said on Wednesday that it's too early to know if the central bank will need to raise its benchmark overnight interest rate in May.

However, she also saw the Fed's policy rate "moving above 5% and the real fed funds rate staying in positive territory for some time."

In corporate news, earnings are expected from drinks giant Constellation Brands (NYSE:STZ) as well as frozen french fry maker Lamb Weston (NYSE:LW) ahead of next week's kick-off proper to the first quarter earnings season, with big banks starring at the end of the week.

Additionally, Costco (NASDAQ:COST) stock fell in premarket after the wholesaler reported a further slowdown in sales in March.

Oil prices fell Thursday as the weak U.S. data raised fears about a potential recession in the world's largest energy consumer.

However, they remain on course for a third consecutive positive week after a fall in U.S. crude inventories and the unexpected OPEC+ output cut.

By 07:00 ET, U.S. crude futures traded 0.3% lower at $80.36 a barrel, while the Brent contract dropped 0.2% to $84.81.

However, both benchmarks have gained more than 6% this week after the Organization of the Petroleum Exporting Countries and allies including Russia, a group known as OPEC+, agreed to further cut crude production and U.S. crude oil inventories fell by 3.7 million barrels last week, official data showed Wednesday.

Gold futures rose 0.1% to $2,036.25/oz, while EUR/USD traded 0.1% lower at 1.0902.