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(Reuters) – Wall Street was set to open higher on Friday after a keenly awaited report showed the unemployment rate rose in August and wage growth slowed, spurring expectations that the Federal Reserve could pause its interest rate hikes.
The Labor Department’s report showed the unemployment rate rose to 3.8% last month against expectations that it would remain unchanged at 3.5%, while wages advanced 0.2% on a monthly basis, moderating from a 0.4% rise in July.
Nonfarm payrolls increased by 187,000 jobs in August, against expectations of 170,000 additions, according to a Reuters poll of economists. Data for July was revised to show 157,000 job additions instead of the 187,000 additions reported before.
Following the data, traders added to bets that the Fed is finished raising its policy rate for the rest of the year, and will start cutting interest rates next year.
“The data is pretty mixed. The initial reaction up is because the market has been very focused on not seeing any outliers that suggest rate rises are likely to keep coming,” said Rick Meckler, partner at Cherry Lane Investments.
“I think these numbers probably put the Fed back on path for one more rate rise and then that’s it.”
U.S. Treasury yields extended declines after the reading, with the yield on the 10-year note last at 4.08%.
The payrolls report follows recent data showing a fall in job openings and softer-than-expected private employment growth, both of which signaled weakness in the labor market.
An inflation reading had also supported hopes of the Fed hitting a pause on its market-punishing tightening campaign, pushing the tech-heavy Nasdaq up to a four-week high on Thursday.
Other data points are also on the radar for Friday, with the S&P Global Manufacturing Final PMI due at 9:45 a.m. ET and the ISM Manufacturing PMI due at 10 a.m. ET. Both readings are for August.
Broadcom (NASDAQ:AVGO) fell 2.8% premarket as the chipmaker projected current-quarter revenue below expectations on softening enterprise demand.
At 8:45 a.m. ET, Dow e-minis were up 134 points, or 0.39%, S&P 500 e-minis were up 22.25 points, or 0.49%, and Nasdaq 100 e-minis were up 80.5 points, or 0.52%.
Dell Technologies (NYSE:DELL) jumped 11.9% after the personal computer maker raised its annual forecasts for revenue and profit as it benefits from the artificial intelligence boom.
Lululemon Athletica (NASDAQ:LULU) gained 2.6% after the yogawear maker said on Thursday its third quarter was “off to a solid start” and lifted its annual profit and revenue forecasts for a second time.
Shares of Walgreens Boots Alliance (NASDAQ:WBA) slipped 0.6% after the pharmacy chain said CEO Rosalind Brewer has stepped down.
