By Niket Nishant and Tharuniyaa Lakshmi
Sept 4 (Reuters) - The S&P 500 and the Dow were set for a lower open on Friday after a hotter-than-expected jobs reading prompted investors to amplify bets the Federal Reserve could hike interest rates this month.
A Labor Department report showed the U.S. economy added 162,000 jobs in August, compared with estimates of 56,000, according to economists polled by Reuters.
The unemployment rate stood at 4.1% last month, as expected.
Traders added to expectations of
an interest rate hike at the central bank's September 15-16 meeting, with short-term interest-rate futures now implying a 65% chance of an increase, up from 55% before the report.
"This is obviously a very volatile report, but it does mean that at this point the Fed's focus is going to be on inflation," said Josh Stevens, chief investment officer at Cresalta Investment Management.
"The argument about the labor market remaining weak has some validity, but if employment shows strength in next few months, we'd see a pickup in wages, and that would get the Fed's attention."
Markets had pulled back on rate-hike bets on Thursday after Fed Governor Christopher Waller said he would support holding rates steady if data shows inflationary pressures are abating. The comments helped equities regain their footing after a subdued start to September.
Economic data has been in greater focus of late, as Fed Chair Kevin Warsh stood pat on not providing forward guidance, and his recent focus on inflation has prompted some analysts to question if labor market trends could influence the central bank's rate outlook.
Labor market momentum has cooled after a strong spring, partly due to higher energy costs following the Iran conflict and supply disruptions that weighed on hiring. Employment growth was also restrained by the impact of President Donald Trump's broad tariff measures.
At 8:45 a.m. ET, Dow E-minis were down 156 points, or 0.29%, S&P 500 E-minis were down 15.75 points, or 0.20%, and Nasdaq 100 E-minis were up 29 points, or 0.09%.
Among stocks, Lululemon Athletica fell 19.5% in premarket trading after it slashed its full-year profit and revenue forecasts.
Adobe dropped 4.4% after it said longtime CEO Shantanu Narayen will hand over the reins to insider Anil Chakravarthy.
U.S. credit reporting agencies lost ground after U.S. Director of Federal Housing Bill Pulte said on Thursday he directed Fannie Mae and Freddie Mac, created by the U.S. Congress to support the housing market, to approve all lenders to use credit scoring system VantageScore.
Fair Isaac lost 13.8%, TransUnion was down 8.7%, while Equifax slid 9.5%.
As investors head into the Labor Day weekend, debate about the seasonal weakness of September also persists.
Historically, September is the weakest month for stocks. But most of the weakness comes in the second half of the month, with returns averaging worse than 1%, according to Melissa Brown, global head of investment decision research at SimCorp.
Investors will also get the latest inflation readings when the Labor Department releases CPI and PPI data next week.
(Reporting by Niket Nishant, Tharuniyaa Lakshmi and Purvi Agarwal in Bengaluru; Editing by Maju Samuel)
