US jobs report could shake markets: Here’s what’s at stake

US employers likely added jobs at a moderate pace in February amid federal government layoffs and a slowdown in consumer spending. Payrolls are projected to rise by 160,000, an improvement from January’s increase of 143,000, according to the median forecast from economists surveyed by Bloomberg. The unemployment rate is expected to hold steady at 4%.

The upcoming report from the Bureau of Labor Statistics will provide critical insights for Federal Reserve officials regarding labor market momentum, which has previously been a key support for household spending and economic stability. However, rapid policy changes by the Trump administration, particularly the initiative led by Elon Musk’s Department of Government Efficiency to shrink the federal government and reduce expenditures, may increase uncertainty regarding future outlooks.

Meanwhile, stock futures increased early Monday amidst ongoing uncertainty regarding President Donald Trump’s tariff plans on major US trading partners. Futures for the Dow Jones Industrial Average rose by 47 points, with S&P 500 futures up 0.2%, and Nasdaq 100 futures gaining 0.25%.

Commerce Secretary Howard Lutnick stated on Fox News that the specifics of the tariffs to be imposed on Mexico and Canada starting Tuesday remain “fluid,” indicating they might be lower than the proposed 25%. He affirmed that the additional 10% tariff on Chinese imports is confirmed.

Treasury Secretary Scott Bessent mentioned on CBS that Mexico has indicated it could match the US tariffs on China, possibly as a strategy to avoid the tariffs set to be enacted against them. Prominent investor Warren Buffett expressed concerns that punitive tariffs could lead to inflation and negatively impact consumers, stating, “Tariffs are actually, we’ve had a lot of experience with them. They’re an act of war, to some degree.”

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The uncertainty surrounding Trump’s trade policies has contributed to market volatility, with all three major indices experiencing declines in February: the S&P 500 dropped 1.4%, the Dow fell by 1.6%, and the tech-heavy Nasdaq Composite lost 4%, marking its worst month since April 2024.

In other financial developments, cryptocurrencies rallied following Trump’s announcement of a strategic US crypto reserve that will include bitcoin and ether. Bitcoin surged 10% to approximately $94,000 after hitting a three-month low below $80,000 last week.

Investors are closely watching the upcoming jobs report, set to be released Friday, which is anticipated to reflect ongoing labor market trends during a time marked by slowing consumer spending. Early assessments indicate that first-quarter earnings estimates for S&P 500 companies have been adjusted downward more than compared to historical averages, with a combined estimate drop of 3.5% in January and February.

In related news, inflation figures, manufacturing activity, and consumer health indicators are expected to be released from various major economies around the world in the coming week. In Canada, for instance, officials continue efforts to protect against US tariff impositions.

The situation in the US labor market will be further evaluated as figures from the Institute for Supply Management and S&P Global are released, which could shed light on any cooling in orders and business activity among manufacturers and service providers.

Finally, upcoming economic data from the US, Canada, Europe, and Asia will be pivotal in understanding global market dynamics, especially regarding trade relationships and inflation trends.

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