US pre-open: Futures pull back before jobs report, Apple underwhelms

(Sharecast News) - US stocks were expected to pull back slightly on Friday after strong gains over recent sessions, with nerves setting in ahead of a potentially market-moving monthly jobs report.

The data, due out at 0830 GMT, is expected to confirm that American labour conditions are starting to soften - which policymakers hope will ease some inflationary pressures. Non-farm payrolls are expected to come in at 180,000 in October, after a whopping 336,000 in September.

"A reading which conforms to consensus will provide further relief both to the Fed and to investors, while a hot reading would complicate the entire narrative once more, likely leading to higher yields and reigniting interest rate hiking concerns," said Richard Hunter, head of markets at Interactive Investor.

Futures on the Dow Jones Industrial Average were flat in pre-market trade, while the S&P 500 slipped 0.1% and the Nasdaq dropped 0.3%, with underwhelming quarterly results from Apple to weigh on sentiment - and share prices - in the tech sector.

US markets have rallied since the start of the week - with Wall Street's three major equity indices surging between 3.2% and 4.7% - on rising hopes that the Federal Reserve's current rate-hiking cycle might be over. The Fed held interest rates steady on Wednesday, but predicted that tighter financial conditions (due to elevated bond yields) would likely hold back economic growth - hinting that the Fed may not have to tighten further in the near term.

Expectations are also rising in the UK and Europe that interest rates have finally reached a peak with the FTSE 100 and Stoxx 600 indices up 2.2% and 2.7% on the week, respectively. The Hang Seng in Hong Kong has also risen by 0.7%, while the Tokyo's Nikkei 225 was jumped 4%.

"The fact markets across the US, Europe and Asia remained in an up-trend suggests investors are gaining confidence that we've finally reached the much-anticipated pivot in central bank policy," says AJ Bell investment director Russ Mould.

Apple futures were down over 3% ahead of the opening bell after fourth-quarter revenues were down 1% at $89.5bn. Apple did surpass analysts' forecasts with its results - which included a record $43.8bn in quarterly iPhone revenues - but disappointed with its outlook for hardware and China sales.

"Once again, we have a tech stock managing to beat on both top and bottom-line growth, but markets continue to take somewhat unforgiving stance, opting to instead focus on weak iPad, wearables and Greater China revenue. Nonetheless, shareholders should remain optimistic given the strong figures across their key iPhone and services segments," said Joshua Mahony, chief market analyst at Scope Markets.