Investing.com – U.S. stock futures are sharply lower ahead of Friday’s all-important December nonfarm payrolls report. The data could weigh on the Federal Reserve’s interest rate expectations, with many central bank officials already signaling some caution about possible future reductions in borrowing costs. On the other hand, Taiwan Semiconductor Manufacturing Co. (TW:) reportedly delivered revenue that exceeded market estimates in the fourth quarter.
1. Futures significantly lower
U.S. stock futures were mostly lower on Friday as investors braced for the release of key employment data later in the session.
By 03:28 ET (0828 GMT), the contract was down 10 points, or 0.2%, down 66 points, or 0.3%, and was mostly unchanged. Wall Street was closed on Thursday for the funeral of former US President Jimmy Carter.
Highlighting the agenda at the end of the trading week is the non-farm payrolls report, which suggests the US economy added fewer jobs in December than the previous month (more below).
The stronger-than-expected figure could put more upward pressure on benchmark US 10-year Treasury yields, which recently hit multi-month highs. As a result, the recently strengthened US dollar could see an even bigger rally, and stocks could find themselves under pressure as traders assess rising futures premiums and elevated discount rates.
Still, in a note to clients, analysts at ING argued that while wages were “key,” the numbers “would need to deviate materially from consensus to have an impact this time around.”
2. Non-agricultural payrolls forward
Economists forecast that the upcoming payrolls report will show that December saw a gain of 164,000 jobs, while the unemployment rate is expected to match November’s 4.2% rate.
Growth in average hourly earnings is also expected to cool slightly to 0.3% from the previous reading of 0.4%.
The report is likely to face close scrutiny from Federal Reserve policymakers, who have signaled some caution about the potential for future rate cuts in part because of recent signs of resilience in the US economy. Minutes from the Fed’s latest meeting suggest some members are now more focused on the possible impact of President-elect Donald Trump’s trade policies on inflation.
Overnight, statements from several Fed officials showed members largely agree there is no rush to cut borrowing costs further. Markets now expect fewer than two cuts this year, with the first not fully set until June, when there may be more clarity around Trump’s plans to impose sweeping new tariffs on both allies and adversaries.
3. TSMC Top Sales Estimates – Report
TSMC reportedly posted better-than-expected fourth-quarter sales as the world’s largest contract chip maker was boosted by strong demand from the fast-growing artificial intelligence industry.
Sales in the October-December period were T$868.42 billion ($26.36 billion), above analysts’ estimates, Reuters reported, citing its own calculations and data from LSEG.
In December alone, the figure jumped 57.8% to T$278.16 billion (US$8.44 billion), TSMC said in a statement on Friday.
The rebound could add to the positive tone of chip demand in 2025, with TSMC in particular continuing to benefit from increased capital spending on data centers and other AI-related infrastructure. This trend largely offset weakness in demand for consumer electronics chips, which TSMC warned was unlikely to improve anytime soon.
TSMC makes chips for several big tech companies, including artificial intelligence darling Nvidia (NASDAQ: ) and iPhone maker Apple (NASDAQ: ) .
4. Tesla (NASDAQ: ) launches facelifted Model Y in China
Tesla has unveiled an updated version of its Model Y range in China as the electric vehicle giant struggles to fend off stiff competition from domestic rivals in the country.
Priced at 263,500 yuan, the updated Model Y is about 5.4% more expensive than the previous version of the car, Tesla said in a post on social media platform Weibo (NASDAQ: ).
The latest model has a new light bar as well as seats that can be heated or ventilated depending on the weather conditions and a touch screen for passengers in the second row of the car.
Deliveries in China, the world’s largest auto market and Tesla’s second-largest region, are scheduled to begin in March, pending regulatory approval.
Sales of the Model Y, the world’s best-selling car, have weakened somewhat as Tesla struggles with rivals in China and weak sales of electric vehicles in other markets.
5. Crude oil on track for weekly gains
Oil prices rose on Friday, on track for a third straight week of gains, with demand boosted by harsh winter conditions in parts of the United States and Europe.
By 03:30 ET, U.S. crude futures (WTI) were up 1.0% at $74.71 a barrel, while the contract was up 1.0% at $77.68 a barrel.
In the three weeks ending January 10, Brent advanced 6%, while WTI jumped 7%.
Many parts of the central and eastern United States are expected to experience below-average temperatures over the next few days, while many regions in Europe are also affected by extreme cold, which is likely to increase heating demand.
(Reuters contributed reporting.)
