Stock futures tightened the flat line Thursday night as investors awaited a key report on the state of the US economic recovery and labor market on Friday morning.

Dow contracts opened slightly lower to retreat after the index hit another all-time high during the regular session. The Nasdaq also ended the session higher to end a four-day losing streak. The S&P 500 rose but drifted just below a record high. Shares of payments firm Square (SQ) jumped more than 2% late in the session after releasing first quarter results that beat past estimates, helped by consumer spending fueled by stimulus and income of Bitcoin. Beyond Meat (BYND), on the other hand, sank after hours after posting quarterly sales that missed estimates and a larger-than-expected loss.

Investors are eagerly awaiting the Labor Department’s April jobs report on Friday morning, with the print likely to show a staggering one million payrolls returned last month, or the most since August. The unemployment rate is expected to drop to a pandemic-era low of 5.8%, but will still remain above 3.5% from February 2020.

If the data arrives as expected, it would likely add to the ‘string’ of months of solid job gains Federal Reserve Chairman Jerome Powell has suggested he would like to see before the central bank considers adjusting its ultra-accommodative monetary policy.

Investors have viewed improving economic data with both optimism about the post-pandemic rebound and apprehension of the implications for monetary policy, with still strong data likely to strengthen the Fed’s case for easing policies that had supported recovery. as well as asset prices. The outlook for higher interest rates weighed particularly heavily on growth and tech stocks, which would see valuations come under pressure once rates rise from their current near zero levels.

Valuation also remains a concern for the larger market, many strategists said. Stocks are trading near record highs even as additional growth catalysts begin to wane, as the economic rebound from the pandemic is already well known. And even given that most companies beat past estimates with first-quarter profits, profits still remain below pre-pandemic levels for many companies.

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“We are 25-30% more expensive on stocks than we were going in 2020, and we don’t have any profit at that level yet. So the big challenge is how quickly earnings can catch up and whether or not investors are scared along the way, ”Sean O’Hara, president of Pacer ETFs Distributors, told Yahoo Finance, citing the inflation, rising rates and supply chain constraints as possible. risks. “We’re sort of in this perilous, shaky zone if you will, looking for a rise in stocks and hoping the earnings catch up.”

“I think where we are in the market is that we kind of got a free spin on the big indexes, and now is the time to start thinking about the small sub-parts of the market that are offering great. better opportunities, ”he added.

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6:13 p.m. ET: ET Thursday: Stock futures drift ahead of jobs report

Here’s where the markets were trading at the start of the overnight session:

• S&P 500 Futures (ES = F): 4,195.25, up 1 point or 0.02%

• Dow Futures (YM = F): 34,430.00, down 12 points or 0.03%

• Future Nasdaq (NQ = F): 13,611.5, up 13.75 points or 0.1%

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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