US STOCKS-Wall St set to open flat as investors weigh labor data

By Johann M Cherian and Pranav Kashyap

Dec 4 (Reuters) - Wall Street was set for a muted open on Thursday as investors parsed a fresh batch of labor market data to gauge the odds of a much-anticipated Federal Reserve interest rate cut when it meets next week.

With the U.S. Labor Department's November payrolls report due after the Fed's December meeting, investors have been leaning on a run of secondary indicators that together sketch an uneven labor picture.

A weekly report by the department showed new applications for unemployment benefits falling to their lowest level in more than three years, even as a Chicago Fed estimate suggested the jobless rate held around 4.4% in November.

Fed funds futures point to an 89.2% chance that the central bank will cut rates by 25 basis points this month, up from around 60% last month, according to the CME Group's FedWatch Tool.

"Today the data is a little bit better, but there's no catalyst there to the upside," said Thomas Hayes, chairman at Great Hill Capital LLC.

"Good data is not going to encourage the Fed to cut more. So this one is a little better than expectations, but not so much better that you get nervous about them following through with the cut next week."

At 08:50 a.m. ET, Dow E-minis YMcv1 were up 14 points, or 0.03%, S&P 500 E-minis EScv1 were up 2.25 points, or 0.03% and Nasdaq 100 E-minis NQcv1 were down 23 points, or 0.09%.

U.S. stocks logged their seventh gain in eight sessions on Wednesday, with the S&P 500 .SPX and Dow .DJI closing at more than a three-week high as a soft ADP jobs print and an ISM survey pointed to cooling inflation.

The Russell 2000 index .RUT, which tracks small-caps that tend to thrive in a lower interest-rate environment, currently outperforms the benchmark S&P 500 .SPX on a quarterly basis. Futures .RTYcv1 tracking the index eased 0.17% on the day.

Brokerages Jefferies and BofA Securities have forecast strong earnings growth for smaller companies next year.

Focus is now shifting to Friday's September Personal Consumption Expenditures report, the Fed's preferred inflation gauge and the first PCE release since the recent U.S. government shutdown left markets and policymakers with limited visibility on the economy.

Traders were also watching developments around U.S. President Donald Trump's selection of the next Federal Reserve chair, in a year of heightened concern over potential political interference in monetary policy.

A report said bond investors have expressed concerns to the U.S. Treasury that Kevin Hassett, a leading contender for the role, might pursue aggressive rate cuts to align monetary policy more closely with President Donald Trump's preferences.

In premarket trading, Snowflake fell 9% after the cloud data analytics company's fourth-quarter product revenue forecast below lofty investor expectations for stronger growth.

Salesforce gained 1.4% after the software maker raised its fiscal 2026 revenue and adjusted profit forecasts.

Hormel Foods HRL.N climbed 5.3% after the Skippy peanut butter maker forecast annual profit above estimates, while Dollar General <DG.N> rose 3.8% after the discount retailer raised its annual profit forecast.