US stock futures traded close to flat on Friday as investors waited for the August jobs report, which could shape expectations for the Federal Reserve’s September policy meeting. Dow futures slipped about 0.1%, while S&P 500 futures edged higher. NASDAQ-100 futures gained around 0.3% to 0.4% in early trading.

Wall Street entered Friday after a strong session. The Dow Jones Industrial Average gained 624 points, or 1.18%, to close at 53,686.11 on Thursday. The S&P 500 rose 1.06% to 7,747.71, while the NASDAQ Composite advanced 1.40% to 26,584.06.

US Jobs Report Takes Center Stage Before Fed Meeting

The August nonfarm payrolls report is due at 8:30 a.m. ET. Economists expect the US economy to have added about 53,000 to 56,000 jobs during the month. The unemployment rate is expected to stay at 4.1%. In July, the economy lost 23,000 jobs.

The report comes less than two weeks before the Federal Reserve's September 15-16 meeting. Traders have recently adjusted their interest rate expectations. Futures markets show roughly equal odds between a rate increase and no change in September.

Federal Reserve Governor Christopher Waller helped ease rate-hike expectations on Thursday. He said recent inflation data showed some progress and indicated that he could support keeping rates unchanged if that trend continues.

"If there is continued progress toward our 2% goal, then I am willing to support holding the policy rate at its current level," said Waller. He also added, "If inflation comes in hot, I would consider a rate hike."

Treasury Yields Ease as Dollar Falls

Treasury yields moved lower after Waller's comments. The US 10-year Treasury yield traded near 4.76% on Friday morning after falling during the previous session. The 30-year yield stood near 5.24%, while the two-year yield was around 4.33%.

Meanwhile, the US dollar weakened as investors reduced bets on an immediate Fed rate increase. The Bloomberg Dollar Spot Index was heading toward a weekly decline of about 0.7%. Lower Treasury yields also added pressure on the greenback.

The Japanese yen strengthened during the week as traders increased bets on tighter monetary policy from the Bank of Japan. The yen was heading for one of its strongest weekly performances since July, supported by expectations that Japan's central bank could raise rates this month.

"The dollar took a step back this week as Fed speak leaned dovish and a yen rally spilled over to the broader USD complex," CIBC Capital Markets strategist Noah Buffam said.

Oil Prices Rise as Middle East Tensions Continue

Oil prices moved higher on Friday as traders watched developments involving the US and Iran. Brent crude futures for November delivery traded near $96 per barrel, while West Texas Intermediate futures for October traded above $91.

Concerns over energy supplies have increased as shipping traffic through the Strait of Hormuz stays below normal levels. The route plays a major role in global oil shipments. Brent crude was also heading for a weekly gain after prices reached a six-week high.

"Physical flows in the Strait of Hormuz remain constrained, with traffic levels below normal," Exness strategist Quoc Dat Tong said. He added that continued regional energy exports have helped limit further upward pressure on crude prices.

European natural gas prices also stayed elevated. Dutch TTF futures recently traded above 70 euros per megawatt-hour after reaching their highest level in around three years earlier in the week.

Asian Markets Rise While European Stocks Trade Lower

Most major Asian markets closed higher on Friday. South Korea's Kospi gained 1.64%, while Japan's Nikkei 225 rose 1.26%. Hong Kong's Hang Seng gained about 1.8% during late trading. Mainland China's CSI 300 finished slightly lower.

European markets opened weaker as investors waited for the US payrolls data. The Stoxx Europe 600 slipped about 0.1% to 0.2%. Chemical and banking shares traded lower, while automobile stocks outperformed.

Volkswagen shares jumped after the company's board backed a restructuring plan that could include up to 50,000 additional job cuts. The move could bring total planned reductions under the wider turnaround program to about 100,000 positions.

In US premarket trading, Lululemon shares dropped about 18% after the company lowered its revenue and profit guidance following weaker second-quarter revenue. 

Tesla also traded lower overnight, while Planet Labs gained after reporting quarterly results that topped Wall Street estimates.

Investors will now assess the August employment figures alongside upcoming inflation data. The August Consumer Price Index is scheduled for September 11, giving markets another major economic reading before the Federal Reserve announces its rate decision.

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