September E-mini S&P 500 Index futures are inching slightly lower early Friday as traders position themselves ahead of today’s US Non-Farm Payrolls report, due to be released at 12:30 GMT.

On Thursday, the benchmark index recorded its fourth consecutive higher close as buyers reacted to Federal Reserve remarks that suggested a more tempered program of interest rate hikes.

At 02:54 GMT, September E-mini S&P 500 Index futures are trading 3895.25, down 9.75 or -0.25%. On Thursday, the S&P 500 Trust ETF (SPY) settled at $388.95, up $5.70 or +1.49%.

Some Investors Betting on Less-Hawkish Fed

The Fed released minutes from its June policy meeting showing a firm restatement of the central bank’s intent to get prices under control. However, policymakers are acknowledging the risk of rate increases having a “larger-than-anticipated” impact on economic growth. Consequently, an increase of 50 or 75 basis points would likely be appropriate at the policy meeting in July.

Echoing the less-hawkish tone were comments from Fed Governor Christopher Waller on Thursday. In calling fears of a U.S. recession overblown, he advocated for a 50 basis-point hike in September.

Looking Ahead…

The closely watch U.S. Non-Farm Payrolls report could set the tone on Friday although some investors could downplay the news because of next week’s consumer inflation report.

The data is expected to show non-farm payrolls likely increased by 260K. The unemployment rate is expected to come in steady at 3.6%. Average hourly earnings are expected to rise 0.3%. All eyes will be on the average hourly earnings number. A stronger-than-forecast number could encourage the Fed to be more aggressive with its rate hikes. This could pressure stocks.

Short-Term Outlook

Trader reaction to the short-term 50% level at 3922.00 is likely to determine the direction of the September E-mini S&P 500 Index futures contract on Friday.

Bearish Scenario

A sustained move under 3921.75 will indicate the presence of sellers. This could lead to a quick break into the minor retracement zone at 3870.25 – 3845.50.

Taking out 3845.50 will indicate the selling pressure is getting stronger. Consequently, this could trigger a further break into the retracement zone at 3794.50 – 3757.75.

A trade through 3741.25 will reaffirm the downtrend.

Bullish Scenario

A sustained move over 3922.00 will signal the presence of buyers. Taking out the main top at 3950.00 will change the main trend to up. This could trigger a surge into the short-term Fibonacci level at 3988.75. This is a potential trigger point for an acceleration to the upside.