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Dow Futures Wobble, Jobs Report Looms—and What Else Is Happening in the Stock Market Today

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The Federal Reserve’s pace of monetary policy tightening remains a key focus for markets.

Saul Loeb/AFP via Getty Images

Stocks were wavering Friday ahead of the closely watched U.S. jobs report, which will give investors their latest view of the health of the economy as tighter monetary policy from the Federal Reserve risks causing a slowdown.

Futures for the Dow Jones Industrial Average rose 30 points, or 0.1%, after the index retreated 85 points Thursday to close at 32,726. S&P 500 futures signaled a start around flat, with the tech-stock-heavy Nasdaq poised to slip less than 0.1%.

Overseas, the pan-European Stoxx 600 lost 0.3% and Tokyo’s Nikkei 225 ended 0.9% higher.

Investor attention is focused on the U.S. jobs report for July due ahead of the opening bell, which is likely to show that jobs growth decelerated last month, reflecting the impact of inflation, higher interest rates, and a slowing economy. Economists expect that the U.S. added 258,000 jobs last month, with the employment rate steady at 3.6%.

“Welcome to another payrolls Friday which after a week of better U.S. data on balance, probably isn’t set up with the market as worried as it could have been,” said Jim Reid, a strategist at Deutsche Bank. “It’s fair to say the market is probably going into today’s print less worried about it than it was at the start of the week.”

Nevertheless, the health of the economy is a crucial indicator for markets at the moment amid expectations that the Fed will continue to tighten monetary policy in a bid to tame red-hot inflation, which is at its highest in four decades.

The Fed has already raised rates four times this year, including two mega-size, 75 basis-point rate increases in June and July—the biggest since 1994—and is expected to keep raising rates this year before cooling off in 2023. The risk is that denting economic demand, while it should bring inflation under control, could cause a recession. Signs that the economy is weakening, such as a deterioration of the labor market, could stem the pace of the Fed’s tightening.

Write to Jack Denton at jack.denton@dowjones.com