Investing.com - U.S. stock futures were subdued on Friday, pointing to some investor caution ahead of the potentially sentiment-swaying release of January’s nonfarm payrolls report. Economists predict that the U.S. added fewer jobs last month than in December, while the jobless rate is seen equaling the pace set in the prior month, possibly suggesting a slow but steady cooling in labor demand that could factor into the Federal Reserve’s interest rate outlook. Elsewhere, Amazon (NASDAQ:AMZN) shares sink after-hours on weak growth at the e-commerce behemoth’s cloud unit, a tepid sales forecast, and signs that the company would maintain elevated levels of spending on artificial intelligence.
1. Futures muted
U.S. stock futures hovered around the flatline as traders looked ahead to the publication of a crucial U.S. labor market report on Friday.
By 03:31 ET (08:31 GMT), the Dow futures contract was mostly unchanged, S&P 500 futures had dipped by 3 points or 0.1%, and Nasdaq 100 futures had inched down by 19 points or 0.1%.
The major averages posted a mixed finish in the prior session, with traders assessing a slew of corporate earnings reports against a backdrop of international trade tensions and worries over Big Tech’s artificial intelligence spending strategies.
In individual stocks, executives at Eli Lilly (NYSE:LLY) said they still see solid demand for its popular obesity drugs despite indications of some easing in sales, helping lift shares in the company. Elsewhere, fashion group Tapestry (NYSE:TPR) improved its profit outlook, sending its stock price up by 12%.
Meanwhile, shares in Honeywell (NASDAQ:HON) slipped after the U.S. conglomerate unveiled plans to divide the business into three independently-listed companies and presented disappointing guidance for 2025 sales and income.
Highlighting the earnings slate after the bell was e-commerce giant Amazon, which reported tepid growth at its all-important cloud computing segment and a lower-than-anticipated current-quarter financial forecast (more below).
2. NFPs ahead
Markets are closely eyeing the release of the January nonfarm payrolls report on Friday, as they attempt to gauge the state of U.S. labor demand and -- by extension -- the potential interest rate path of the Federal Reserve.
Economists are predicting that the U.S. economy added 169,000 jobs last month, down from 256,000 in December. The unemployment rate is also tipped to come in at 4.1% and average hourly earnings growth is seen at 0.3% month-on-month, both matching the paces set in December.
Earlier this week, separate data points showed that private payrolls expanded in January, while job openings slipped by the most in 14 months.
However, resilient hiring and a relatively low level of layoffs have suggested that the labor market is not entering a sudden downturn, bolstering the case for the Fed to leave interest rates unchanged until at least June.
3. Amazon earnings
Shares in Amazon sank by as much as 5% in extended hours trading in the wake of the tech titan’s fourth-quarter earnings report, wiping around $90 billion off the value of the stock.
Sentiment was dented by a smaller-than-projected 19% uptick in revenue at Amazon Web Services, the firm’s money-spinning cloud division, to $28.79 billion, due in part to an uneven supply of chips. Analysts had seen the figure at $28.87 billion, according to LSEG data cited by Reuters.
Amazon’s forecast for first-quarter sales of $151 billion to $155 billion also disappointed average expectations of $158 billion.
As it was with several of Amazon’s mega-cap tech peers, traders were also focusing in on comments from management about the company’s AI spending plans. Following the emergence of a low-cost AI model from Chinese start-up DeepSeek last week, investors have begun to raise questions around the necessity -- and eventual profitability -- of recent massive capital expenditures on AI by Big Tech names.
Amazon said it is planning to spend more than $100 billion this year in its push to build out its generative AI services, which would be higher than the $78 billion it spent last year.
4. Bitcoin lower
Bitcoin remained under pressure on Friday, as global risk appetite weakened following U.S. President Donald Trump’s announcement of new tariffs earlier this month.
The price of the world’s most popular cryptocurrency was down 1.3% at $96,933.6 by 03:32 ET.
Bitcoin has fluctuated within a narrow range in recent sessions, reflecting investor caution in an uncertain macroeconomic environment. Along with the heightened trade tensions, the outlook for Fed policy and global growth has been murky, keeping traders on edge.
5. Oil on pace for weekly decline
Oil prices edged higher Friday, but were on track for a third straight negative week, hurt by the renewed trade war between China and the U.S., and the potential of tariff hikes from the Trump administration on other countries.
By 03:33 ET, the U.S. crude futures (WTI) had gained 0.9% to $71.22 a barrel, while the Brent contract had risen 1.0% to $75.00 a barrel.
Both benchmarks are on track to register losses of around 2% this week.
Trump announced a 10% tariff on Chinese imports earlier this week, but suspended plans to impose steep tariffs on Mexico and Canada. He has also threatened the European Union with duties on exports to the U.S., as part of a broad plan to improve the U.S. trade balance with the bloc.