* Futures lower: Dow 235 pts, S&P 20.25 pts, Nasdaq 49.50 pts
By Tanya Agrawal
Feb 2 (Reuters) - U.S. stock index futures were sharply lower on Friday, with Dow futures dropping more than 250 points, as bond yields rose to multi-year highs and investors awaited key U.S. jobs data.
Benchmark 10-year Treasury yields jumped to more than 2.8 percent, its highest level since early 2014. A rise in yields raises borrowing costs for companies and give traders an alternative investment option.
The pace of the recent rise in yields has been spurred by global central banks striking a more hawkish tone, with the U.S. Federal Reserve being the latest, as impressive economic data drives long-term inflation expectations.
The Fed on Wednesday indicated inflation was firming, but held interest rates steady. Currently the market has priced in three hikes for 2018. But if economic indicators continue improving, then the likelihood of a fourth rate hike increases.
A key indicator of U.S. economic health is the Labor Department's monthly payrolls data, due at 8:30 a.m. ET (1330 GMT).
The report is expected to show nonfarm payrolls increased by 180,000 jobs in January, according to a Reuters survey of economists, after rising by 148,000 in December.
Average hourly earnings likely rose 0.3 percent, after a similar gain in December and the unemployment rate is expected to have stayed unchanged at a 17-year low of 4.1 percent.
At 7:02 a.m. ET, Dow e-minis were down 235 points, or 0.9 percent, with 59,672 contracts changing hands.
S&P 500 e-minis were down 20.25 points, or 0.72 percent, with 239,468 contracts traded.
Nasdaq 100 e-minis were down 49.5 points, or 0.72 percent, on volume of 69,910 contracts.
Some investors have also grown wary of the pace of the global equity bull run, and have begun reducing their exposure to equities. Bank of America Merrill Lynch said in a weekly note on global asset flows that its bull and bear indicator hit 8.6, triggering a sell signal for risk assets.
The U.S. stock market roared out of the blocks in 2018, before pulling back this week due to rising yields. The S&P 500 and the Dow Jones Industrial Average are on track to post their biggest weekly losses since the end of 2016.
Even reports from major companies have failed to enthuse.
Shares of Google-parent Alphabet fell 4.3 percent in premarket trading after the company's quarterly profit missed analysts' estimates.
Apple was struggling for direction and was last up 0.4 percent as investors weighed up strong iPhone prices and cash plans with the company's muted forecast.
Amazon.com rose 5.1 percent after reporting a record profit of near $2 billion, helped by a rise in online sales and tax law changes.
So far, the S&P 500 companies have posted strong results, with about 80 percent of the 227 that have reported beating Wall Street's profit estimates, according to Thomson Reuters data. (Reporting by Tanya Agrawal in Bengaluru; Editing by Savio D'Souza)