(Bloomberg) — Stock futures rose and bonds fell as traders awaited key jobs figures for clues on the Federal Reserve’s next steps.

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S&P 500 contracts rebounded, though the US benchmark was still poised for a decline this week amid speculation the Fed would delay the start of rate cuts after solid economic data. A flare-up in geopolitical tensions also caused heightened volatility, with Brent oil trading above $90 a barrel. Treasury 10-year yields rose two basis points to 4.33%. In the options market, traders were targeting a move to almost 4.5% by the end of this week.

The government’s monthly employment report is expected to show about a 215,000 gain in nonfarm payrolls, which include private- and public-sector jobs. That pace, the median estimate in a Bloomberg survey, would be the slowest since November, following three solid months averaging 265,000.

Countdown to Jobs Data:

Today the focus will be on the jobs report. The risk for this market remains for a ‘too hot’ report that shows strong job adds, low unemployment and hot wages. A number modestly below expectations would be welcomed as ‘Goldilocks’ and likely spur a rebound in stocks and bonds.

We’ve been seeing some cracks in the overall strong labor market, and this report will likely continue to see some softening in terms of the number of jobs added. Still, unemployment is expected to drop slightly — while the participation rate is expected to rise — which would be positive for the market.

March’s employment situation report is broadly expected to reinforce the ongoing resilience of the labor market which has continued to afford the FOMC sufficient flexibility to push its higher-for-longer agenda.

We expect that labor supply strength and job growth will continue for a good part of 2024 before gradually subsiding and the unemployment rate ending 2024 at around 4%.

The Fed is on track to cut interest rates in June, according to Ellen Zentner, chief US economist at Morgan Stanley.

“It’s going to be more about inflation, if the Fed were to cut as early as May,” she told Bloomberg Television on Friday. “I think the bar is very high for them to go that soon though. But I do still expect them to be ready by June.”

Speaking from the same event, Nouriel Roubini, chairman of Roubini Macro Associates, highlighted the reversal of markets now being less optimistic on rate cuts than the Fed itself.

Corporate Highlights:

Tesla Inc. is slashing prices of its best-selling vehicle in a bid to clear its biggest-ever stockpile.
- The company is marking down Model Y sport utility vehicles it has in inventory, with the rear-wheel drive version going for $4,600 less than the cost to custom order the sport utility vehicle. Long-range and performance Model Ys are discounted by at least $5,000.
Johnson & Johnson agreed to acquire Shockwave Medical Inc. for about $13.1 billion in enterprise value to bolster its expansion into making medical devices to treat heart disease.
Apple Inc. laid off more than 600 employees in California as part of the decisions to end its car and smartwatch display projects, according to filings with the California Employment Development Department.

Some of the main moves in markets:

Stocks

S&P 500 futures rose 0.3% as of 8:09 a.m. New York time
Nasdaq 100 futures rose 0.4%
Futures on the Dow Jones Industrial Average rose 0.3%
The Stoxx Europe 600 fell 1.1%
The MSCI World index fell 0.3%

Currencies

The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0841
The British pound was little changed at $1.2639
The Japanese yen was little changed at 151.37 per dollar

Cryptocurrencies

Bitcoin fell 1.9% to $66,631.73
Ether fell 2.7% to $3,235.4

Bonds

The yield on 10-year Treasuries advanced two basis points to 4.33%
Germany’s 10-year yield advanced one basis point to 2.38%
Britain’s 10-year yield advanced three basis points to 4.05%

Commodities

This story was produced with the assistance of Bloomberg Automation.

Stock Futures Bounce After Slide as Jobs in Focus: Markets Wrap

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