Stock futures fell early Friday morning ahead of a key jobs report as investors kept an eye on developments in the war in Ukraine.
Futures tied to the Dow Jones Industrial Average dropped 145 points, or 0.43%. Those for the S&P 500 declined 0.67%, while Nasdaq 100 futures moved down 0.74%.
Stock futures earlier turned negative Thursday evening following reports that smoke was visible from a nuclear power plant in Ukraine — the largest in Europe — after Russian troops attacked.
Some of those losses were later pared after the nuclear power plant’s director said the facility’s nuclear security is secured at the moment. Ukrainian authorities also posted a subsequent update that the fire had been put out.
The situation in Ukraine is rapidly deteriorating, and reports from the country are difficult to confirm.
The moves come in advance of the Labor Department’s February jobs report. Economists surveyed Dow Jones expect growth of 440,000 jobs, and the unemployment rate to tick down to 3.9%. Hourly wages are projected to grow 5.8% year over year.
This is the last jobs report before the Federal Reserve’s next meeting, where the central bank is expected to begin hiking interest rates. Fed Chair Jerome Powell said on Wednesday that he is leaning toward support a single 25-basis point hike in March. A basis point is equal to 0.01%.
“I think because we saw Powell say, uncharacteristically frankly, specifically say that the planned to support a 25-basis point hike, that speculative thinking may be a little bit more anchored at a 25-basis point hike even if we do see a stronger-than-expected report tomorrow,” said Lauren Goodwin, economist and portfolio strategist at New York Life Investments.
The wage growth component of the report could a key data point as traders try to figure out the policy path for the path, Goodwin said.
“Even 5.8% wage growth is a wage cut if inflation is creeping up above 7%,” Goodwin said.
The war on Ukraine will also be at the front of investors’ minds on Friday. Ukraine still holds its capital city, Kyiv, more than a week into the fighting, though reports of shelling have increased in other major cities. One million Ukrainians have fled the country, according to the United Nations.
Meanwhile, economic sanctions from the U.S. and its allies have effectively cut off Russia’s economy from large parts of the global financial system. JPMorgan said in a note on Thursday that Russia’s economy could shrink by 35% at an annualized rate in the second quarter.
Energy prices have spiked since the invasion, though they cooled slightly during Thursday’s trading. Futures for U.S. benchmark West Texas Intermediate crude were modestly higher at about $109 per barrel on Thursday evening.
Earnings reports drove some big moves in extended trading. Retailer Gap and restaurant chain Sweetgreen both surged after beating expectations. Chipmaker Broadcom rose after outpacing estimates for earnings and revenue.
On Thursday, the three major averages closed lower after a choppy session. The Dow was positive for much of the day before closing 96 points lower. The Nasdaq, dragged down by software stocks, fell 1.56%.
The Dow is down 0.9% for the week, on track for its fourth negative week in a row. The S&P 500 is down about 0.5% for the week, while the Nasdaq Composite is down more than 1%.
