Market Analysis

US stock futures remained mostly flat on Thursday as investors awaited new labor market data expected to influence the Federal Reserve’s next interest rate decision. Meanwhile, reports suggest that President Joe Biden plans to block Nippon Steel’s acquisition of US Steel (NYSE), and Verizon is said to be in advanced talks to buy Frontier Communications.

1. Futures Hold Steady
US stock futures were largely steady on Thursday as investors braced for fresh labor market data. These figures could impact the Federal Reserve’s upcoming monetary policy decision.

As of 03:31 ET (07:31 GMT), Dow futures had risen by 22 points or 0.1%, S&P 500 futures climbed by 5 points or 0.1%, and Nasdaq 100 futures remained mostly unchanged.

On Wednesday, the S&P 500 and the Nasdaq Composite closed in negative territory after a volatile session, while the Dow Jones Industrial Average ended in the green.

Investor sentiment was underpinned by a recent report showing US job openings fell to a 3.5-year low in July, signaling a gradual slowdown in labor demand. Additionally, Atlanta Fed President Raphael Bostic warned that maintaining high interest rates for too long could disrupt the employment landscape.

These developments have fueled expectations that the Fed might consider cutting rates during its upcoming meeting later this month.

In stocks, Nvidia (NASDAQ) shares dropped 1.7% after denying reports of receiving a subpoena from the US Department of Justice regarding an antitrust investigation.

2. Upcoming Payroll Data and Jobless Claims
Investors will get a clearer picture of the US labor market on Thursday with the release of the ADP National Employment Report and weekly jobless claims figures. These precede Friday's highly anticipated August jobs report.

Last month, private payrolls increased by less than expected. Meanwhile, unemployment claims for the week ending August 24 met forecasts at 231,000.

Though Thursday's data will be closely watched, the main focus will be Friday's nonfarm payrolls report. Economists predict that the US economy added 164,000 jobs in August, a rise from July’s 114,000 figure. The underwhelming July data had triggered broader market concerns about a potential US recession.

3. Biden Expected to Block Nippon Steel-US Steel Deal
President Joe Biden is expected to block Nippon Steel’s $14.9 billion acquisition of US Steel due to national security concerns, according to media reports.

Sources cited in the reports indicate Biden’s decision will be announced soon. A government panel overseeing foreign investments informed Nippon Steel that these security concerns could not be mitigated, according to the Financial Times.

Both Biden and Vice President Kamala Harris, the current Democratic candidate for president, have opposed the deal. Donald Trump, Harris’s Republican rival, has also voiced opposition.

US Steel warned that blocking the deal could jeopardize thousands of union jobs and lead to the closure of several steel mills. US Steel’s shares fell over 17% on Wednesday following the news.

4. Verizon in Talks to Acquire Frontier Communications
Verizon (NYSE) is reportedly in advanced discussions to acquire Frontier Communications (NASDAQ), potentially expanding its fiber network, according to a Wall Street Journal report.

An announcement could come as early as this week. Frontier, which provides broadband services across 25 US states and emerged from bankruptcy in 2021, had a market value of $7 billion as of Tuesday.

Following the report, Frontier's shares surged by 38%, while Verizon’s stock fell by more than 3%.

5. Crude Prices Edge Higher
Crude prices recovered slightly on Thursday following steep declines to multi-month lows. Reports indicated that major oil producers might delay planned output increases, and US inventories also dropped.

By 03:30 ET, Brent crude rose 0.6% to $73.15 per barrel after hitting its lowest close since late June, while US crude futures (WTI) were up 0.6% to $69.61 per barrel, after a significant drop on Wednesday.

Support came from American Petroleum Institute data showing that US crude oil inventories fell by 7.431 million barrels last week, well above the expected draw of 1 million barrels.

OPEC+ is reportedly discussing postponing its scheduled production increase for October, according to a Reuters report citing sources.

Paraphrasing text from "Investing" all rights reserved by the original author.