Futures Steady as Private Payrolls and Jobless Claims Approach

US stock futures remained mostly steady on Thursday as investors prepared for a series of labor market reports this week, which could influence the Federal Reserve’s upcoming interest rate decisions. Additionally, reports indicate that President Joe Biden is expected to block Nippon Steel’s acquisition of US Steel, while Verizon is reportedly in advanced discussions to buy Frontier Communications.

1. Futures Remain Steady

US stock futures showed stability on Thursday as investors anticipated updated labor market data that might affect the Federal Reserve’s next monetary policy decision. By early morning, the S&P 500 futures had gained 22 points, or 0.1%, while other indices showed minor fluctuations.

The previous day saw mixed results, with both the benchmark S&P 500 and the tech-heavy Nasdaq closing in the red after a volatile trading session, while the Dow Jones Industrial Average ended slightly higher. Recent data indicated a decline in job openings in the US to a three-and-a-half-year low, signaling a possible slowdown in labor demand. Atlanta Fed President Raphael Bostic cautioned that sustained high interest rates could lead to "disruptions" in employment.

These developments have fueled speculation that the Fed may consider cutting rates at its upcoming meeting.

In individual stock movements, shares of Nvidia experienced a decline of 1.7%. The company denied rumors of receiving a subpoena from the Department of Justice related to antitrust inquiries.

2. Upcoming Employment Data

On Thursday, investors will be looking for insights into the US employment landscape, with key reports, including private payroll figures and initial jobless claims, set to be released. Earlier ADP data showed that private payroll growth in July was weaker than expected. Predictions for initial unemployment claims were in line with forecasts, amounting to 231,000 for the week ending August 24.

The most significant report of the week will be the comprehensive jobs report from the Labor Department, scheduled for Friday. Economists anticipate an addition of around 164,000 jobs in August, a notable increase from the 114,000 jobs added in July. The previous month’s figures, which disappointed, raised concerns about the potential for a US recession.

3. Biden to Block Nippon Steel-US Steel Merger

Reports suggest that President Joe Biden plans to block Nippon Steel’s proposed $14.9 billion takeover of US Steel due to national security concerns. Sources indicate that this decision will be announced soon. A government panel overseeing foreign investment has communicated that national security concerns could not be resolved.

Both Biden and Vice President Kamala Harris have previously expressed opposition to the merger, with Harris’s Republican challenger, Donald Trump, also voicing disapproval. US Steel has warned that failing to finalize the deal could jeopardize thousands of union jobs and force the closure of several steel mills. US Steel’s shares plummeted over 17% following the news.

4. Verizon Pursues Frontier Communications Acquisition

Verizon is reportedly in advanced talks to acquire Frontier Communications, which would enhance its fiber network capabilities. An announcement regarding the acquisition could occur within the week, according to reports. The specific value of the deal has not been disclosed. As of the market’s close on Tuesday, Frontier Communications was valued at $7 billion and operates broadband services across 25 US states, having exited bankruptcy in 2021. Following news of the talks, shares of Frontier jumped approximately 38%, while Verizon’s stock declined by over 3%.

5. Crude Oil Prices Edge Up

Crude oil prices increased slightly on Thursday after recently dropping to multi-month lows. This rise is attributed to reports that major oil producers may postpone planned output increases alongside a decrease in US inventories. As of early Thursday, Brent crude rose by 0.6% to $73.15 per barrel, while West Texas Intermediate (WTI) futures also increased by 0.6% to $69.61 per barrel.

Supporting this price movement, data from the American Petroleum Institute indicated a significant decline in US crude oil inventories, down by 7.431 million barrels, exceeding expectations for a 1 million barrel reduction. Furthermore, OPEC+ members are reportedly discussing delaying the proposed increase in oil output slated for October.