The major U.S. index futures are currently pointing to a sharply lower open on Friday, with stocks likely to come under pressure after ending Wednesday’s lackluster session little changed.

The futures showed a significant move to the downside following the release of the Labor Department’s closely watched monthly employment report.

The report showed much stronger than expected job growth in the month of December, adding to recent concerns about the outlook for interest rates.

The Labor Department said non-farm payroll employment surged by 256,000 jobs in December after jumping by a downwardly revised 212,000 jobs in November.

Economists had expected employment to climb by 160,000 jobs compared to the addition of 227,000 jobs originally reported for the previous month.

The report also said the unemployment rate edged down to 4.1 percent in December from 4.2 percent in November. Economists had expected the unemployment rate to come in unchanged.

While the report points to continued strength in the labor market, the data is also likely to give the Federal Reserve confidence in its plan to gradually lower interest rates over the coming year.

Following the sharp pullback seen over the course of Tuesday’s session, stocks showed a lack of direction during trading on Wednesday. The major averages spent the day bouncing back and forth across the unchanged line before eventually closing narrowly mixed.

While the tech-heavy Nasdaq edged down 10.80 points or 0.1 percent to 19,478.87, the Dow rose 106.84 points or 0.3 percent to 42,635.20 and the S&P 500 crept up 9.22 points or 0.2 percent to 5,918.25.

The choppy trading on Wall Street came amid uncertainty about the outlook for interest rates following the release of mixed U.S. jobs data.

While payroll processor ADP released a report showing private sector job growth slowed more than expected in December, the Labor Department released a report showing weekly jobless claims unexpectedly fell to their lowest level in almost eleven months.

ADP said private sector employment rose by 122,000 jobs in December after climbing by 146,000 jobs in November. Economists had expected private sector employment to grow by 140,000 jobs.

The report said hiring slowed in several industries, while employment in the manufacturing sector shrank for the third straight month.

“The labor market downshifted to a more modest pace of growth in the final month of 2024, with a slowdown in both hiring and pay gains,” said ADP Chief Economist Nela Richardson.

Meanwhile, the Labor Department released a separate report unexpectedly showing another modest decrease by initial jobless claims in the week ended January 4th.

The report said initial jobless claims slipped to 201,000, a decrease of 10,000 from the previous week’s unrevised level of 211,000. Economists had expected jobless claims to rise to 218,000.

With the unexpected dip, jobless claims fell to their lowest level since hitting 200,000 in the week ended February 17, 2024.

The Labor Department is scheduled to release its more closely watched monthly jobs report on Friday, potentially providing additional clarity about the strength of the labor market.

While the Federal Reserve released the minutes of its latest monetary policy meeting later in the day, they did not provide much insight into the outlook for interest rates other than to suggest officials plan to take a “careful approach” to future decisions.

Most of the major sectors ended the day showing only modest moves, contributing to the lackluster performance by the broader markets.

Gold stocks showed a significant move to the upside, however, with the NYSE Arca Gold Bugs Index surging by 2.5 percent. The rally by gold stocks came amid an increase by the price of the precious metal.

Natural gas and housing stocks also saw notable strength on the day, while steel, computer hardware and semiconductor stocks moved to the downside.

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