Stocks Fall Ahead of Jobs as Slowdown Fears Mount: Markets Wrap

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US stocks and an index of the dollar fell ahead of jobs data due Friday that will help determine the size of a Federal Reserve rate cut this month.

-- US stock futures fell as traders braced for jobs data that will be critical in determining the health of the US economy and the size of a Federal Reserve interest rate cut later this month.Nasdaq 100 contracts were down more than 1% while the S&P 500 was set for a fourth day of declines. Nvidia Corp. dropped 1.6% in premarket trading as chipmakers slid following disappointing guidance by Broadcom Inc.

Swap contracts are fully pricing in 25 basis points of cuts when Fed officials meet in two-weeks time, with a roughly one-in-three chance of a 50 basis-point reduction. Even so, traders at Citigroup Inc. are anticipating even deeper cuts, wagering on three half-points of easing this year. Forecasters anticipate Friday’s report will show a bounce in hiring and a tick lower in the unemployment rate in August, marking a stabilization after July. Payrolls probably rose by 165,000 last month following July’s 114,000 increase, according to the median estimate in a Bloomberg survey of economists. Unemployment probably edged down to 4.2%.

In Europe, a key measure of euro-zone wage growth eased, proving further assurance to European Central Bank officials seeking to lower interest rates next week. Should inflation continue to abate, borrowing costs will be lowered every quarter until they reach 2.5%, according to a Bloomberg survey.Currency strategists see a strong chance the yen will test its August high versus the dollar if the payrolls data boost bets for a 50 basis-point move.

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