(Reuters) – U.S. stock index futures slipped on Friday, pressured by a drop in Apple shares following a dour holiday-quarter forecast, while investors awaited a crucial employment report for more cues on the interest rate trajectory.
Apple tumbled 3.3% in premarket trading after its sales forecast for the current quarter fell short of Wall Street expectations, even as an uptick in iPhone sales and strong services revenue lifted fourth-quarter results above estimates.
Other megacap growth stocks were mixed, with the benchmark 10-year Treasury yield steady at 4.67% after dropping to a three-week low in the previous session.
“The only thing that could save Apple from falling into dark waters is… a further rally in U.S. bonds, and a further fall in yields,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
Wall Street’s main indexes rallied on Thursday, with the S&P 500 logging its biggest one-day percentage gain since April on growing optimism that the Federal Reserve had reached the end of its monetary tightening campaign.
All three major indexes are tracking their biggest weekly gain in about a year.
Investors are focused on the Labor Department’s report, due at 8:30 a.m ET (12:30 GMT), which is expected to show U.S. job growth likely slowed last month, partly due to the strike against the Detroit Big Three automakers.
Economists polled by Reuters expect non-farm payrolls to have increased by 180,000 jobs in October, after surging 336,000 in September, with the unemployment rate seen steady at 3.8%.
The reading, which will come on the heels of a mixed set of data on the labor market this week, could bolster the view that the U.S. central bank need not raise interest rates further. But analysts have cautioned that a stronger-than-expected report may bring concerns about interest rates back to the fore.
“Any strength in job additions or wages growth data could bring bond trades back to earth and remind them that if the US jobs market – and the economy – remains this strong, the Fed could turn hawkish again,” said Ozkardeskaya.
At 5:12 a.m. ET, Dow e-minis were down 10 points, or 0.03%, S&P 500 e-minis were down 8.25 points, or 0.19%, and Nasdaq 100 e-minis were down 60 points, or 0.4%.
Among major movers, Fortinet dropped 23.3% premarket as the cybersecurity firm forecast fourth-quarter revenue below Wall Street estimates.
Coinbase shares fell 3% after the cryptocurrency exchange’s trading volumes declined for the second quarter in a row.
Block jumped 18.4% after the payments firm raised its annual adjusted profit forecast.
(Reporting by Amruta Khandekar; Editing by Sriraj Kalluvila)
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