US stock-index futures were little changed after the jobs report showed that employment growth cooled slightly but remained strong, clearing the path for the Federal Reserve to remain aggressive in its fight against inflation.

Contracts on the S&P 500 remained flat while Nasdaq 100 futures fell. US Treasuries fell, but the two- and 10-year yield remained inverted for the fourth day. The Bloomberg Commodity Index is headed for the longest streak of weekly losses since March 2020. The dollar rose.

Labor-market data has shown early signs of softening, but investors are mixed on the report. Bloomberg economists are factoring in the possibility that slightly softer data will prompt the central bank to go back to 50 basis point moves, even after the report showed job gains topped analyst estimates. Others see the recent data as a signal that fears of recession are overblown and say that the downshift may be too modest to shake the Fed from its path.

“The economy is slowing but the Fed wants it to slow. So I think all the recession talk is a little bit premature right now,” Priya Misra, global head of rates strategy at TD Securities, said on Bloomberg TV. “Inflation is still a problem and the Fed has changed their reaction function, I would argue. They are emphasizing – overemphasizing – headline inflation over the labor market right now. If the labor market is slowing, I don’t think the Fed will change their view.”

Two of the Fed’s most hawkish policy makers, on Thursday, backed raising interest rates another 75 basis points this month, while playing down recession fears. A strong jobs report “could bring forward the idea that the US economy could soft-land despite tighter Fed policy, or that the Fed would allow itself to get more aggressive to fight inflation,” Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, wrote in a note. 

Shockwaves spread through the markets as Japan’s former Prime Minister Shinzo Abe was assassinated. Asian stocks pared an increase and the yen, a haven asset, strengthened. Before the shooting, the possibility of 1.5 trillion yuan ($220 billion) of stimulus in China, mostly for infrastructure, had aided sentiment.

On Thursday, Governor Christopher Waller and James Bullard, president of the St. Louis Fed, both stressed the need to get policy into restrictive territory to confront the hottest price pressures in 40 years, even if this meant slowing growth. Both are voting members of the Federal Open Market Committee this year.

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Some of the main moves in markets:

Stocks

• Futures on the S&P 500 were little changed as of 8:30 a.m. New York time
• Futures on the Nasdaq 100 fell 0.3%
• Futures on the Dow Jones Industrial Average rose 0.1%
• The Stoxx Europe 600 was little changed
• The MSCI World index rose 1.6%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro fell 0.2% to $1.0135
• The British pound fell 0.3% to $1.1990
• The Japanese yen was little changed at 136.00 per dollar

Bonds

• The yield on 10-year Treasuries advanced three basis points to 3.03%
• Germany’s 10-year yield declined two basis points to 1.29%
• Britain’s 10-year yield advanced two basis points to 2.14%

Commodities

• West Texas Intermediate crude fell 0.2% to $102.52 a barrel
• Gold futures were little changed.

SOURCE:- bloomberg