US stock futures drift lower with nonfarm payrolls, earnings in focus

Investing.com– U.S. stock index futures fell on Thursday evening amid persistent concerns over a slower pace of interest rate cuts in 2025, with upcoming nonfarm payrolls data set to provide more cues on the economy. 

The fourth-quarter earnings season is also set to begin in earnest next week, with a slew of major banks on tap.

Trading volumes were thin on account of a market holiday on Thursday to honor the death of former President Jimmy Carter. 

Wall Street indexes were nursing a choppy start to 2025, as hawkish signals from the Federal Reserve and uncertainty over President-elect Donald Trump’s policies weighed on risk appetite. 

fell 0.3% to 5,942.50 points, while fell 0.3% to 21,287.75 points by 18:11 ET (23:11 GMT). fell 0.2% to 42,809.0 points.

Nonfarm payrolls awaited for more rate cues 

Focus was now squarely on for December, due on Friday, for more cues on the labor market and the path of interest rates.

Strength in the labor market is expected to give the Fed even more headroom to cut interest rates at a slower pace. Fears of a labor market slowdown were one of the main motivations for the Fed cutting rates by 1% in 2024. 

But the central bank slashed its outlook for rate cuts in 2025, citing concerns over sticky inflation. The minutes of the Fed’s December meeting, released on Wednesday, also showed policymakers were concerned over the inflationary impact of protectionist policies under Trump. 

Treasury yields and the dollar surged after the minutes were released on Wednesday, further pressuring Wall Street. 

Q4 earnings season kicks off with major banks 

The fourth-quarter earnings season is set to begin in earnest next week, with several major banks, including JPMorgan Chase & Co (NYSE:), Wells Fargo & Company (NYSE:), Goldman Sachs Group Inc (NYSE:), and Citigroup Inc (NYSE:) set to report on Wednesday.

Before that, Delta Air Lines Inc (NYSE:) and Walgreens Boots Alliance Inc (NASDAQ:) are set to report earnings on Friday.

Focus will be largely on whether resilience in the U.S. economy translated into strength in corporate earnings, and whether heavyweight technology stocks- which were a key driver of Wall Street in 2024- were able to maintain their earnings growth.

Investors will also be watching for any signs of earnings strength spreading outside the tech sector.