Looming Jobs Report May Lead To Choppy Trading On Wall Street

The major U.S. index futures are currently pointing to a roughly flat open on Thursday, with stocks likely to extend the lackluster performance seen over the course of the previous session.

Traders may be reluctant to make significant moves ahead of the release of the Labor Department’s closely watched monthly jobs report on Friday.

Economists currently expect employment to increase by 130,000 jobs in May after jumping by 177,000 jobs in April, while the unemployment rate is expected to hold at 4.2 percent.

The data could have a significant impact on the outlook for the economy following yesterday’s weaker than expected reports on private sector employment and service sector activity.

With the more closely watched monthly jobs report looming, the Labor Department released a report this morning showing first-time claims for U.S. unemployment benefits unexpectedly increased in the week ended May 31st.

The report said initial jobless claims climbed to 247,000, an increase of 8,000 from the previous week’s revised level of 239,000.

Economists had expected jobless claims to dip to 235,000 from the 240,000 originally reported for the previous week.

Meanwhile, the Commerce Department released a separate report showing a substantial decrease in the size of the U.S. trade deficit in the month of April.

After moving mostly higher to start the week, stocks fluctuated over the course of the trading day on Wednesday. The major averages bounced back and forth across the unchanged line before eventually closing narrowly mixed.

While the Dow dipped 91.90 points or 0.2 percent to 42,427.74, the S&P 500 inched up 0.44 points or less than a tenth of a percent to 5,970.81 and the Nasdaq rose 61.53 points or 0.3 percent to 19,460.49.

Despite the choppy trading, the Nasdaq and the S&P 500 once again reached their best closing levels in well over three months.

The lackluster performance on Wall Street came following the release of some weaker than expected U.S. economic data.

While the data raised concerns about the strength of the economy, it also generated some optimism about the outlook for interest rates.

Before the start of trading, payroll processor ADP released a report showing much weaker than expected private sector job growth in the month of May.

ADP said private sector employment rose by 37,000 jobs in May after climbing by a downwardly revised 60,000 jobs in April.

Economists had expected private sector employment to jump by 115,000 jobs compared to the addition of 62,000 jobs originally reported for the previous month.

In a post on Truth Social immediately after the report was released, President Donald Trump once again urged Federal Reserve Chair Jerome Powell to lower interest rates.

“ADP NUMBER OUT!!! ‘Too Late’ Powell must now LOWER THE RATE,” Trump said. “He is unbelievable!!!”

A separate report released by the Institute for Supply Management showed service sector activity in the U.S. unexpectedly saw a slight contraction in the month of May.

The ISM said its services PMI fell to 49.9 in May from 51.6 in April, with a reading below 50 indicating contraction. Economists had expected the index to inch up to 52.0.

With the unexpected decrease, the services PMI dropped to its lowest level since hitting 49.2 in June 2024, which marked the last time the index was in contraction territory.

However, the Fed is still widely expected to leave interest rates unchanged at its next meeting later this month, with CME Group’s FedWatch Tool currently indicating a 95.6 percent chance the central bank will leave rates unchanged.

Despite the lackluster performance by the broader markets, housing stocks moved significantly higher on the day, driving the Philadelphia Housing Sector Index up by 1.7 percent.

Considerable strength was also visible among semiconductor stocks, as reflected by the 1.4 percent gain posted by the Philadelphia Semiconductor Index.

Gold and pharmaceutical stocks also saw some strength on the day, while energy stocks came under pressure as the price of crude oil gave back ground following a two-day surge.

Commodity, Currency Markets

Crude oil futures are rising $0.27 to $63.12 a barrel after falling $0.56 to $62.85 a barrel on Wednesday. Meanwhile, after climbing $22.10 to $3,399.20 an ounce in the previous session, gold futures are advancing $18.50 to $3,417.70 an ounce.

On the currency front, the U.S. dollar is trading at 143.06 yen versus the 142.77 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1432 compared to yesterday’s $1.1417.

Asia

Asian stocks ended mixed on Thursday as investors digested a pair of disappointing reports on the U.S. economy and looked ahead to key non-farm payrolls data on Friday for direction.

The dollar remained under pressure ahead of the European Central Bank’s rate decision later in the day and amid bets the Federal Reserve will deliver two quarter-point cuts by year-end, in October and December. Gold was little changed, while oil edged up slightly on dollar weakness.

Chinese markets eked out modest gains a day after U.S. President Donald Trump described Chinese President Xi Jinping as “extremely hard” to strike a deal with.

The benchmark Shanghai Composite Index rose 0.2 percent to 3,384.10, while Hong Kong’s Hang Seng Index jumped 1.1 percent to close at 23,906.97.

Japanese markets ended lower as a 30-year bond auction saw the weakest demand since 2023, ramping up pressure on the government to adjust issuance.

The Nikkei 225 Index dropped 0.5 percent to 37,554.49 ahead of fifth round of trade talks with the U.S. over high tariffs. The broader Topix Index settled 1.0 percent lower at 2,756.47.

Automakers Honda and Toyota fell around 2.7 percent each. Suzuki Motor tumbled 3 percent, with reports suggesting that it had suspended production of its Swift car due to China’s rare earth restrictions.

Seoul stocks rose for a third straight session to hit an 11-month high as the new government vowed to restart talks with North Korea and beef up a trilateral partnership with the U.S. and Japan.

The Kospi jumped 1.5 percent to 2,812.05, with tech stocks leading the surge. Samsung Electronics rallied 2.3 percent and SK Hynix added 3.2 percent.

Australian markets fluctuated before ending marginally lower as April’s trade balance figures missed expectations.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index climbed 0.7 percent to 12,577.15.

Europe

European stocks are seeing modest strength during trading on Thursday after the European Central Bank announced its widely expected decision to lower interest rates by another quarter point.

The German DAX Index is up by 0.4 percent, the French CAC 40 Index is up by 0.3 percent and the U.K.’s FTSE 100 Index is up by 0.2 percent.

In other economic news, German factory orders unexpectedly increased for the second straight month in April, though at a slower pace, data from Destatis showed earlier today.

Factory orders rose 0.6 percent month-on-month in April following a revised 3.4 percent surge in March. Meanwhile, orders were forecast to fall 1.0 percent.

On a yearly basis, factory orders logged an expansion of 4.8 percent, faster than the 3.7 percent growth in the prior month.

Elsewhere, the U.K.’s Office for National Statistics said the annual inflation rate for April was overstated due to a data error stemming from a government department.

According to revised data, consumer price inflation for the 12 months to April 2025 stood at 3.4 percent instead of the 3.5 percent reported earlier.

Nordex has moved to the upside on securing a 56-MW order from Umwelt Management AG for a repowering project in Lower Saxony, Germany.

Office landlord Workspace Group has also moved notably higher after posting strong full-year results and lifting annual dividend.

Wise shares have also surged after the fintech firm said it would move its primary listing from London to New York.

Meanwhile, Mitie Group has plummeted. The outsourcer said it would acquire smaller peer Marlowe for about 366 million pounds ($496 million) in a cash-and-stock deal.

Wizz Air Holdings has also plunged. The budget carrier reported an approximately 62 percent slide in annual operating profit, citing growth challenges and capacity constraints.

U.S. Economic News

With the more closely watched monthly jobs report looming, the Labor Department released a report on Thursday showing first-time claims for U.S. unemployment benefits unexpectedly increased in the week ended May 31st.

The report said initial jobless claims climbed to 247,000, an increase of 8,000 from the previous week’s revised level of 239,000.

Economists had expected jobless claims to dip to 235,000 from the 240,000 originally reported for the previous week.

The Labor Department said the less volatile four-week moving average also rose to 235,000, an increase of 4,500 from the previous week’s revised average of 230,500.

Largely reflecting a sharp pullback by the value of the imports, the Commerce Department released a report on Thursday showing a substantial decrease in the size of the U.S. trade deficit in the month of April.

The Commerce Department said the U.S. trade deficit narrowed to $61.6 billion in April from a revised $138.3 billion in March.

Economists had expected the trade deficit to shrink to $94.0 billion from the $140.5 billion originally reported for the previous month.

The significantly smaller trade deficit came as the value of imports plummeted by 16.3 percent to $351.0 billion, while the value of exports jumped by 3.0 percent to $289.4 billion.

Meanwhile, revised data released by the Labor Department on Thursday showed U.S. labor productivity tumbled by much more than previously estimated in the first quarter of 2025.

The Labor Department said labor productivity slumped by 1.5 percent in the first quarter compared to the previously reported 0.8 percent decline. Economists had expected the decrease by labor productivity to be revised to 0.7 percent.

Meanwhile, the report said unit labor costs spiked by 6.6 percent in the first quarter compared to the previously reported 5.7 percent surge. Economists had expected the jump in unit labor costs to be unrevised.

At 11 am ET, the Treasury Department is scheduled to announce the details of this month’s auctions of three-year and ten-year notes and thirty-year bonds.

Federal Reserve Board Governor Adriana Kugler is due to speak on the economic outlook and monetary policy before an Economic Club of New York luncheon at 12 pm ET.

Philadelphia Federal Reserve President Patrick Harker is scheduled to speak on the economic outlook before the Philadelphia Council for Business Economics at 1:30 pm ET.

Also at 1:30 pm ET, Kansas City Federal Reserve President Jeffrey Schmid is due to speak on banking policy before “The Future of Banking: Navigating Change” conference hosted by the Kansas City Fed.