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Investing.com - U.S. stock futures hover mostly above the flatline, with markets focusing their attention on the upcoming publication of the all-important monthly nonfarm payrolls report. The data could provide fresh insight into the trajectory of U.S. interest rates, as traders are broadly certain the Federal Reserve will cut borrowing costs at its next meeting later this month. Elsewhere, ChatGPT-maker OpenAI is reportedly preparing to produce its own artificial intelligence chip with Broadcom.
1. Futures tick mostly higher
U.S. stock futures pointed slightly higher on Friday, as investors geared up for the release of a hotly-anticipated monthly jobs report.
By 03:40 ET (07:40 GMT), the Dow futures contract was mostly unchanged, S&P 500 futures had gained 10 points, or 0.2%, and Nasdaq 100 futures had increased by 87 points, or 0.4%.
The main averages on Wall Street advanced in the prior session, with the benchmark S&P 500 in particular notching a fresh record closing high. Underpinning sentiment was labor market data that further bolstered wagers that the Federal Reserve will slash interest rates at its upcoming policy meeting this month.
Figures showed that private-sector hiring slowed last month, while new claims for unemployment benefits edged up by more than anticipated -- both fresh indications of possible cooling in the American jobs picture.
2. NFPs ahead
The numbers served as precursor to the main event on the economic calendar this week: the publication of the August nonfarm payrolls report.
Economists expect the U.S. to have added 75,000 roles during the month, up slightly from 73,000 in July.
Analysts have suggested that a soft or even tepid reading could all but cement expectations of a Fed rate reduction at the central bank’s September 16-17 gathering. According to CME’s FedWatch Tool, markets are pricing in a nearly 100% chance of a 25-basis point drawdown in borrowing costs from the Fed’s current target range of 4.25% to 4.5%.
Fed officials are facing pressures to both pillars of their mandate -- keeping price growth stable and promoting maximum employment -- although recent comments from policymakers have indicated that supporting the labor market may be their current priority. Cutting interest rates can help to spur spending by businesses and consumers, albeit at the risk of pushing up lingering inflation.
Adding to the debate around Friday’s report will be the fallout from the prior print, which was both unexpectedly weak and featured deep downward revisions to the June and May totals. The numbers drew the ire of President Donald Trump, who dismissed the head of the agency collating the data, saying -- without evidence -- that the report had been tampered with to hurt him politically. He later nominated a loyalist as a replacement.
3. OpenAI to produce its own AI chip with Broadcom - FT
OpenAI is preparing to begin manufacturing its own artificial intelligence chip from 2026 in partnership with Broadcom, the Financial Times reported on Thursday, citing people familiar with the plans.
The move comes as OpenAI seeks to address rapidly increasing computing power requirements for its AI programs, while also reducing its reliance on Nvidia.
Broadcom CEO Hock Tan on Thursday said the company had a new, undisclosed customer committing to $10 billion in orders, with the FT report stating that this was OpenAI.
The ChatGPT maker plans to use the new chip internally, rather than supplying them to external customers, the FT report said. OpenAI had last year begun a collaboration with Broadcom over an AI chip, but the timeline for mass production had been unclear.
The FT report comes just hours after Broadcom clocked strong quarterly earnings and presented an upbeat outlook for the current quarter. Broadcom’s shares rose by more than 6% in extended hours trading.
4. Trump preparing to restart North American trade deal renegotiation - WSJ
Trump’s administration is preparing to begin renegotiating the U.S.-Mexico-Canada free trade deal, the Wall Street Journal reported on Thursday evening.
The Office of the U.S. Trade Representatives will begin public hearings on renegotiating the deal, and faces an October 4. Deadline to do so. The agency could issue a request for comment from companies and unions by as soon as this week, the WSJ reported, citing people familiar with the administration’s thinking.
But the consultations will only be the first official act in what is likely seen as a months-long process in renegotiating the deal, which Trump had signed in 2020. The USMCA deal had replaced the 1992 North American Free Trade Agreement, and was one of the key trade achievements of Trump’s first term.
However, the president has somewhat undermined the agreement by imposing and scaling back steep trade tariffs against Canada and Mexico this year.
5. Gold muted
Gold prices were subdued in early European trading, as U.S. rate cut bets kept the yellow metal close to recent peaks and investors awaited the upcoming nonfarm payrolls data.
Bullion, along with broader metal prices, was set for weekly gains, fueled partially by the dollar losing ground amid rising conviction in a September borrowing cost reduction.
Lower rates tend to benefit non-yielding assets such as metals by lowering the opportunity cost of investing in the segment over government debt.
Spot gold rose 0.1% to $3,547.80 an ounce, while gold futures for December were mostly unchanged at $3,607.82/oz by 03:32 ET. Spot prices hit a record high of $3,578.80/oz earlier this week.