Dow edges higher ahead of jobs report

The Dow is on pace for a third-straight day of gains. Investors remain cautiously optimistic ahead of the August jobs report.

Futures are pointing to a higher market ope: Dow futures areup more 100 points, or 0.4%. Futures for the S&P 500 are up 0.4%, while Nasdaq Composite futures are trading 0.3% higher.

Stocks have closed higher over the past two sessions, logging their best day in three weeks on Thursday amid optimism over US-China trade relations. Washington and Beijing are set to return to the negotiating table in October.

The jobs report for August is due at 8:30 a.m. ET, and the headline number is expected to be lower than in July amid a summer lull and escalating trade war. Economists expect 158,000 new jobs were added to the economy last month. The unemployment rate is forecast unchanged at 3.7%.

Investors will also be focused on wage growth, with an eye on any signals for a rebound in inflation.

A sluggish report could add to fuel to the fire of expectations for further interest rate cuts. The Federal Reserve first cut rates in July to boost the economy. Expectations for a quarter percentage point cut at the September 18 meeting are at 91%, according to the CME’s FedWatch tool.

A hot jobs report with strong wage growth numbers could knock expectations for a cut, and weigh on stocks.

A speech by Fed Chairman Jerome Powell at 12:30 p.m. ET is also on the calendar Friday.

“He will likely underscore the mounting trade policy risks to the outlook, at a time when inflation is already shy of the target, global and domestic economies are slowing, and US manufacturing is contracting,” said Priscilla Thiagamoorthy, economic analyst at BMO, in a note.