US equity futures pointed to a firmer open on Friday, as investors weighed a deliberately restrained American military response to Iran’s downing of a US drone against the prospect of a significant slowdown in April hiring.
S&P 500 and Nasdaq 100 futures edged higher, while Dow futures gained 156 points in early trading.
The White House confirmed limited retaliatory strikes following recent clashes with Iran, describing the response as calibrated to avoid broader escalation.
The session’s pivotal moment will arrive at 8:30am Eastern, when the Bureau of Labor Statistics publishes the April non-farm payrolls report.
5 things to know before Wall Street opens
1. US strikes Iran, but keeps it contained
Washington confirmed late Thursday that it had launched a limited military response after Iran shot down a US drone, framing the action as deliberately measured and “de-escalatory.”
Officials said the strikes were calibrated specifically to avoid broader escalation following Tuesday’s attack on oil tankers in the Gulf.
Markets had feared a more aggressive response; the restrained approach provided a degree of relief, with futures edging higher and oil retreating.
2. April payrolls set to show sharp hiring slowdown
The April non-farm payrolls report, due at 8:30am Eastern on Friday, is the session’s defining macro event.
Economists surveyed by Dow Jones expect the US economy to have added approximately 62,000 jobs in April — a steep deceleration from March’s surprisingly strong 178,000 print, which was the largest monthly gain since December 2024.
The unemployment rate is expected to hold at 4.3%, while average hourly earnings are forecast to rise 0.3% month-on-month, lifting the annual pace to 3.8% from 3.5%.
3. Treasury yields ease as bond markets price in a softer economy
US Treasury yields edged lower in early Friday trade as investors repositioned ahead of the April payrolls release, with bond markets signalling growing conviction that the economy is losing momentum.
The 10-year yield — the benchmark rate that underpins mortgage, auto loan and credit card pricing — slipped in early trade as WTI crude futures were 0.4% lower at $94.43 a barrel, easing the inflation premium that had been embedded in longer-dated bonds throughout the week.
4. Datadog surges; Thursday’s session closes mixed
Datadog was the standout, surging 30.61% after reporting a significant jump in sales and raising its full-year outlook, reinforcing the market’s appetite for profitable software companies with AI exposure.
McDonald’s beat on both revenue and earnings, reporting $6.52bn in quarterly sales and adjusted earnings per share of $2.83, yet the stock was unable to lift the broader market.
5. Earnings calendar: Ubiquiti Networks leads Friday’s slate
With the bulk of the S&P 500 earnings season now behind it, the remaining reporting schedule is thinner but still relevant to specific sectors.
Ubiquiti Networks is set to report before Friday’s open, offering a read on enterprise networking demand at a moment when technology capital expenditure remains a key market theme.
Wendy’s follows on 9 May, providing a data point on consumer spending in the quick-service restaurant segment, while Brookfield Asset Management reports on 10 May with implications for alternative assets and real estate.
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