A trader works on the floor of the New York Stock Exchange (NYSE) in New York, USA on Monday, August 23, 2021.

Michael Nagel | Bloomberg | Getty Images

US stock futures were stable in overnight trading Thursday as investors prepared for the August job report.

Dow futures only rose 6 points. S&P 500 futures gained 0.05% and Nasdaq 100 futures were unchanged.

On Thursday, the S&P 500 and Nasdaq rose to new records on better-than-expected jobless claims data. Initial unemployment insurance claims fell to their lowest level since March 2020.

The Department of Labor reported a total of 340,000 first-time unemployment benefits for the week ended August 28, compared to its estimate of 345,000.

The S&P 500 rose 0.3% to hit its 54th record high in 2021. The tech-heavy Nasdaq Composite rose 0.14% to close at an all-time high. The Dow Jones Industrial Average rose 131 points, or 0.4%.

Investors now look to August’s non-farm payroll report, released Friday morning, which could provide clues as to how quickly the Federal Reserve will lift its loose monetary policy. Economists polled by Dow Jones estimate 720,000 new jobs were created in the month, up from 943,000 in July. The unemployment rate is projected to fall to 5.2% from 5.4% in July.

The projections for the report are wide ranging, from around 300,000 to 1 million.

“The number of employees could have a significant impact on the equity and bond markets, largely because it could move the target post for the start of QE tapering by the Federal Reserve again,” said Jim Paulsen, chief investment strategist of the Leuthold Group. “There are many concerns that the continued surge in the Delta variant will weaken economic growth enough to force the Fed to pull it back this year.”

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Fed chairman Jerome Powell has stressed the need for stronger employment data before the central bank abandons its massive bond-buying program.

The central bank will also look to see if there are any tell-tale signs that Covid has affected attitudes and activity. The virus variant has been a wild card for the economy, and its impact could be a factor influencing the Fed as it considers taking the first step away from easing policies.

“If the job count turns out to be significantly weaker than expected, an impending reduction in bonds could be postponed, leading to another decline in bond yields, a shift in equity leadership away from small caps and cyclical stocks, back to technology and defensive stocks and possibly one Overall decline for the stock market, “added Paulsen.

The S&P 500 and Nasdaq started September with strong feet. The S&P 500 and Nasdaq Composite are up 0.6% and 1.3% respectively this week. The Dow has been about flat since Monday.