Investing.com – Futures linked to the main U.S. averages hug the flatline, as traders prepare for critical job market figures that are expected to paint the picture of a resilient, if relatively tepid, American labor market. Elsewhere, a fresh attack by Houthi militants on Saudi Arabia exacerbates fears of a widening Middle East conflict, while Iran and Oman are said to be close to securing an agreement on the Strait of Hormuz waterway.
1. Futures muted
U.S. stock futures were subdued on Friday, with investors gearing up for the release of key employment data which could influence the Federal Reserve’s future interest rate decisions.
By 02:52 ET (06:52 GMT), the had dipped by 66 points, or 0.1%, futures were mostly unchanged, and had risen by 54 points, or 0.2%.
The main averages on Wall Street retreated on Thursday. The spent much of the session hugging the flatline before finishing down by 0.06%, as sentiment around the tech-heavy index was dented by earnings from memory-chip makers Sandisk and Western Digital which were solid but featured outlooks that failed to live up to sky-high expectations.
Meanwhile, the blue-chip slipped by 0.85%, breaking a five-day winning streak, pulled down by a fall in shares of firms like Salesforce and UnitedHealth.
The benchmark S&P 500 dropped by 0.18%, although analysts at Vital Knowledge argued that it was “impressive the index didn’t fall more than it did considering a number of negatives.” Along with the underwhelming tech earnings, the analysts highlighted a fresh spike in , new concerns about the communication strategy and independence of the Fed, and a rally in oil prices.
2. NFPs ahead
Attention now turns to the economic calendar, which will be headlined today by the Labor Department’s monthly nonfarm payrolls report.
The U.S. economy is expected to have added 85,000 jobs last month, up from 57,000 in June, potentially underlining resilience in the American labor market. For months, incoming data has indicated that while employers are not hiring workers at an elevated clip, layoffs remain muted.
The unemployment rate is also seen at 4.2%, matching the prior month. However, recent numbers have suggested that Trump’s major immigration crackdown and more baby-boomer retirements have weighed on the number of available workers, with the size of the labor force declining by 720,000 from May to June. The participation rate, a gauge of the share of working-age people that are either employed or looking for a job, also sank to 61.5% in June, the lowest level since the COVID-hit days of March 2021.
Separate figures this week also showed a contraction in employment in the services sector, which accounts for two-thirds of total economic output, while a gauge of private-sector employment increased by 44,000 in July, compared to 95,000 in June.
Still, recent U.S. growth data has pointed to solid underlying demand in the broader economy, according to Thomas Ryan, Senior North America Economist at Capital Economics.
Against this backdrop, investors have been debating how the Fed will choose to approach interest rate decisions in the coming months. Policymakers can raise borrowing costs to help quell energy-fueled inflation, although that would come at the risk of denting the labor market and the wider economy.
3. Saudi Arabia warns of widening conflict after new Houthi attack
Saudi Arabia has issued a fresh warning of an expanding conflict in the Middle East, after Iran-backed Houthis in Yemen launched an attack on the country which wounded 11 civilians.
Seven Saudis, one Yemeni, two Egyptians, and one Pakistani national were injured in the strikes on Thursday, Reuters reported, citing a spokesperson for the Saudi-led military coalition backing Yemen’s internationally recognized government. The Houthis and Iran did not have an immediate comment.
Despite recent reports of progress in a deal to reopen the Strait of Hormuz and lower regional tensions, worries have abounded that the conflict may continue to widen, potentially further disrupting critical oil supply flows in the process.
U.S. President Donald Trump has refused to say if a deal has been forged which will fully reopen the the strait, even as Iran claims that it is in the “final stage” of drafting an agreement on the channel with Oman.
Speaking to reporters on Thursday, Trump instead suggested that the strait has been “sort of open right now.” Shipping figures cited by media reports have shown that while some tankers are transiting the conduit, the volume of tankers making the journey is still well under levels before the outbreak of the Iran war in late February.
Iran’s foreign ministry spokesperson has said that a joint statement with Oman — which, along with Iran, borders the strait — will be issued “if certain parties do not obstruct the process,” seemingly a reference to the U.S. and suggesting that any deal is likely to depend on Washington lifting a blockade of Iranian ports.
Quoting an unnamed U.S. official, the Associated Press reported that any temporary routes through the strait will not place obstacles like approvals or charges in front of ships. However, separate reports said Iran is reviewing a ban on U.S. and Israeli vessels passing through the strait.
Benchmark , which have gyrated throughout this year on developments in the conflict, were last higher by 1.2% at $83.46 a barrel.
4. Meta ordered to pay more than $900 million over child safety case
was ordered by a New Mexico judge to pay more than $900 million into a fund to address harm to young users, marking one of the most significant court rulings yet against a social media company over child safety concerns.
The ruling, handed down by Judge Bryan Biedscheid in the First Judicial District Court in Santa Fe, follows a March jury verdict that found Meta had violated New Mexico’s consumer protection law by misrepresenting the safety of Facebook and Instagram for children.
According to the Albuquerque Journal, which reviewed the court’s 67-page order, the judge also required Meta to implement a series of changes to better protect minors using its platforms.
A $567 million abatement fund will be used to support behavioral health services, prevention programs and other initiatives aimed at addressing the impact of social media on young people. In addition to a previous $375 million civil penalty awarded by a jury earlier this year, Meta’s total liability in the New Mexico case now stands at $942 million.
5. earnings due on Saturday
Looking ahead to the weekend, investment conglomerate Berkshire Hathaway is set to announce its latest quarterly earnings.
The numbers will offer investors a look under the hood of the sprawling business, which is now led by Greg Abel, who succeeded Wall Street legend Warren Buffet at the helm of the Nebraska-based company.
In the first quarter, Berkshire reported an increase in first-quarter operating profit, even as the firm dealt with headwinds from geopolitical tensions and economic uncertainty confronting many of the businesses it invests in. Berkshire’s cash pile also stood at $380.2 billion, as the company grappled with years of struggle to find a massive acquisition.
A few weeks after the report, Berkshire disclosed several new moves, including a $2.65 billion investment in carrier Delta Air Lines and limited holdings of department store chain Macy’s. Many of its smaller stock holdings in Amazon, Visa and Mastercard were also sold.
