Hello traders,
The futures market heads into Friday’s nonfarm payrolls release perched at record highs, with S&P 500 E-minis trading near 6,525.
On the surface, the tape looks calm, but as every seasoned trader knows, NFP day rarely ends quietly.
This morning’s setup is shaped by three forces: Broadcom’s stellar earnings, Fed officials openly signaling a September cut, and a labor market that looks increasingly fragile.
Together, they’ve built the perfect risk-on backdrop heading into today’s 8:30 AM release.
I broke down my bread-and-butter setup, a must-read if you’re positioning ahead of the Fed. Make sure you check it out!
Broadcom lit up tech overnight, posting stronger-than-expected revenue and a 63 percent jump in AI-related sales. Nasdaq futures are leading, and when semis push, NQ often drags ES higher.
On the other side of the ledger, Lululemon’s double downgrade of its profit forecast shows that not every consumer-facing name is immune.
That divergence matters, because it reminds us that beneath the surface, leadership remains narrow.
The real catalyst, though, is the jobs report. Forecasts sit at 75,000 new jobs with unemployment ticking up to 4.3 percent. A weak print could immediately ignite speculation of a 50-basis-point cut, sending futures through the 6,550 level. A stronger number may dampen dovish bets, but as we’ve seen before, resilience in the labor market does not necessarily derail risk appetite if growth optimism picks up. In other words, traders should expect both sides of the tape to fire.
Technically, ES is consolidating just under resistance at 6,527–6,535.
A breakout above opens the path toward 6,550 and potentially 6,570. On the downside, support rests at 6,518, then 6,500 as a psychological anchor.
Bond yields continue to soften, with the 10-year at 4.17 percent, and the VIX has slipped back to 15.3. That combination, falling yields, low volatility, and strong futures, is the classic Fed easing setup. But traders should stay alert: compressed volatility heading into a major data print is often the calm before the storm.
The game plan is straightforward. Respect 6,535 as the breakout trigger, fade spikes that run too far too fast, and be ready for whipsaw price action around 8:30 AM.
If this changes how you see price, don’t miss the setup that ties it all together – built on imbalance, liquidity, and timing ahead of the Fed. It’s pure auction logic in action.
With the Fed’s September decision less than two weeks away, today’s labor data will shape not only the next move in futures but also the narrative driving the market into year-end.
For futures traders, this is one of those days where preparation meets opportunity. The tape is telling us the market is ready to move, now it’s up to the jobs data to decide which way.
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See you in the next one.
Imre Gams
Editor, The Trading Room
