Stock futures fall after jobs report shows surprise jump in payrolls

Stock futures fell Friday morning, giving back earlier overnight gains as investors viewed a much stronger-than-expected jobs report as bolstering the case for the Federal Reserve to continue down its more hawkish monetary policy path.

S&P 500 futures dipped after rising by more than 1% earlier during the overnight session. Nasdaq futures also sank. A day earlier, the Nasdaq Composite index sank by 3.7% for its worst single-day decline since September 2020. Oil prices also remained in focus on Thursday as U.S. West Texas intermediate crude oil prices jumped further above $90 per barrel after crossing that threshold for the first time since 2014 on Thursday.

New labor market data was the major focal point for investors on Friday, showing employment growth held up much more robustly than expected despite the surge in Omicron cases at the beginning of the year. Payrolls grew by 467,000, or well above the 125,000 expected to return, and job gains for December were upwardly revised to more than half a million. The labor force participation rate also improved markedly, and average hourly earnings jumped by a greater-than-expected 5.7%, or the most since May 2020.

The latest jobs report came as a surprise following a string of other softening data points on the state of the labor market, with ADP’s private payrolls report showing earlier this week the first contraction in private-sector employment in more than a year. But Friday’s report offered potential fodder for the hawks in the Federal Reserve to press ahead with their plans to raise interest rates and begin tightening in the near-term, as the economic recovery continues to progress.

“If we take a step and we think about why markets have been weak, going on not just for this year, but really into the latter part of 2021, it’s been the hawkish policy pivot, and that’s not just in the U.S., but it’s increasingly a global one,” Chris Pollard, Cowen managing director and head of market strategy, told Yahoo Finance Live on Thursday. “The idea of a tightening of the monetary spigot is increasing, and certainly, the idea that that is going to occur is going to lead to pressures on multiples. It’s also going to move people a little bit inward on the risk curve.”

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A batch of upbeat quarterly results from Amazon (AMZN), Snap (SNAP) and Pinterest (PINS) helped dispel some of the gloom hanging over technology shares from during the regular trading day, after Meta Platforms (FB) offered an outlook that fell well short of Wall Street’s expectations.

Investors responded favorably to Amazon’s announced price hike on its premium Amazon Prime subscription and better-than-expected growth in its lucrative cloud computing business unit. And Snap and Pinterest each topped Wall Street estimates for quarterly sales and earnings, suggesting Meta Platforms may have been alone among the ad-driven internet companies in bearing the brunt of headwinds from competition and Apple iOS software changes.

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7:32 a.m. ET: Friday: Stock futures mixed ahead of jobs report

Here’s where markets were trading Friday morning:

• S&P 500 futures (ES=F): -5 points (-0.11%), to 4,464.00

• Dow futures (YM=F): -145.00 points (-0.41%), to 34,826.00

• Nasdaq futures (NQ=F): +56.75 points (+0.39%) to 14,549.00

• Crude (CL=F): +$1.90 (+2.10%) to $92.17 a barrel

• Gold (GC=F): +$7.10 (+0.39%) to $1,811.20 per ounce

• 10-year Treasury (^TNX): -0.7 bps to yield 1.82%

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6:13 p.m. ET Thursday: Stock futures jump after Amazon earnings

Here were the main moves in markets during the overnight session:

• S&P 500 futures (ES=F): +45.25 points (+1.01%), to 4,514.25

• Dow futures (YM=F): +148 points (+0.42%), to 35,119.00

• Nasdaq futures (NQ=F): +265.5 points (+1.83%) to 14,757.75

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter