U.S. stock futures tick higher as soft jobs data eases Fed hike bets

Investing.com-- U.S. stock futures edged up on Sunday evening after Wall Street closed higher on Friday, as weaker-than-expected jobs data reduced expectations for another Federal Reserve interest-rate hike this month, while elevated Treasury yields and oil prices limited gains.

Before you buy NVIDIA: our AI model's stock picks are beating the market by 120%+. See the list now »

S&P 500 Futures inched 0.1% higher to 7,784.0 points, while Nasdaq 100 Futures rose 0.3% to 31,148.0 points by 20:06 ET (00:06 GMT). Dow Jones Futures traded 0.1% higher at 51,513.0 points.

Stocks ended Friday's session higher after the Labor Department reported that U.S. employers added just 29,000 jobs in September, well below economists' expectations for a 90,000 increase.

The unemployment rate rose to 4.2% from 4.1%, while August payroll growth was revised lower to 133,000 from 162,000.

The data prompted traders to scale back expectations for a Fed rate increase at the central bank's upcoming meeting. Markets were pricing in roughly an 80% probability that the Fed would leave rates unchanged this month, according to CME FedWatch.

Not finding the right stocks? Our AI's list of investor-grade stock picks for October just dropped »

The softer labor market has supported rate-sensitive technology shares. On Friday, the NASDAQ Composite rose 1.2%, while the S&P 500 gained 0.7% and the Dow Jones Industrial Average added 0.5%,

Still, gains in U.S. equities face pressure from a renewed selloff in government bonds and persistent concerns about energy-driven inflation.

Treasury yields initially fell after the jobs report but later reversed higher, as investors remained wary that elevated oil prices could keep inflation above the Fed's comfort zone.

Oil prices remain a key risk for markets as the conflict involving Iran continues to disrupt energy supplies. Brent crude has traded above $100 a barrel, while the prospect of prolonged disruptions has kept inflation concerns elevated.

The energy market's inflationary impact could complicate the Fed's policy outlook even as the labor market shows signs of cooling.

Investors will also focus on the start of the third-quarter earnings season, with corporate results likely to test whether elevated borrowing costs and energy prices are weighing on profit expectations.

Schneider Electric close to $20 bln deal for U.S. software maker PTC - report

UK set to impose Chinese EV levies amid EU trade pressure - report