Wall Street futures fluctuate slightly; strong employment data dampens expectations of Federal Reserve rate cuts

Investing.com - U.S. stock index futures saw slight fluctuations on Wednesday evening, following a quiet trading session on Wall Street. Major indices closed nearly unchanged as traders digested a stronger-than-expected jobs report, which dampened hopes of an imminent Federal Reserve rate cut.

S&P 500 futures rose slightly by 0.1% to 6,963.75, while Nasdaq 100 futures declined by 0.1% to 25,262.75, as of 8:04 p.m. Eastern Time (1:04 a.m. Beijing time). Dow futures increased by 0.1% to 50,228.0.

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In regular trading, Wall Street’s main indices closed nearly flat after initially reacting positively to January employment data.

The S&P 500 ended unchanged, the Dow Jones Industrial Average fell 0.1%, ending a three-day winning streak, and the Nasdaq Composite declined 0.2%.

Strong Jobs Report Diminishes Expectations of Fed Easing

Data released on Wednesday showed that U.S. nonfarm payrolls increased by 130,000 last month, well above economists’ expectations, while the unemployment rate slightly decreased to 4.3%.

Stronger labor market data reinforced the view that the U.S. economy remains resilient, but also reduced the likelihood of the Fed cutting rates soon, prompting traders to scale back bets on upcoming policy easing.

The report also included significant revisions to past data, highlighting potential softness in the labor market over the past year.

“U.S. job gains in January exceeded expectations, but substantial downward revisions show that—apart from leisure and hospitality, private healthcare, and government sectors—the economy has actually been losing jobs,” said ING analysts in a report.

“It suggests that risks still lean toward the Fed cutting rates more than our current forecast of two cuts,” they added.

Market focus is shifting to Friday’s Consumer Price Index (CPI) report, as traders seek more clues about inflation trends and the timing of future rate moves.

McDonald’s and Cisco Earnings in Spotlight

McDonald’s (NYSE:MCD) reported quarterly results that beat revenue and sales expectations, but its stock performed modestly in after-hours trading.

Cisco Systems (NASDAQ:CSCO) shares fell 7% in after-hours trading after the networking equipment manufacturer released quarterly earnings and guidance that disappointed investors.

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