Stock futures fall, Treasury yields rise as Wall Street weighs on jobs data

Stock futures fall, Treasury yields rise as Wall Street weighs on jobs data
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U.S. stocks fell early Friday as the government’s main employment indicator showed the labor market grew more slowly in September.

US economy It added 263,000 jobs last month the unemployment rate fell to 3.5%. Economists had expected a gain of 255,000 and unemployment to remain at 3.7%.

Futures linked to the S&P 500 (^GSPC) fell 0.7%, while futures on the Dow Jones Industrial Average (^ DJI) shed more than 100 points, or 0.4%. Nasdaq Composite (^IXIC) futures led the decline, falling 1.3%. Meanwhile, in the bond market, Treasury yields rose, with the benchmark 10-year note up 7 basis points to 3.90% and the 2-year yield up 8% to 4.32%.

stocks closed the previous trade lower for the second straight day after a a two-day rally explosion limped. Still, the major averages remain firm from their 2022 lows and look set to end the week on a positive note.

Investors are betting on it signs of a cooling labor market It will force Federal Reserve policymakers to reverse course on aggressive rate hikes, especially after a series of weaker economic statements decrease in production activity and fewer jobs. But many Wall Street strategists argue that hopes of an imminent turnaround are premature.

In a recent research note, JPMorgan analysts said equity bulls would need up to a 100,000-month lower wages print to see the market change Fed expectations, while Bank of America analysts said a turnaround would not occur “until wages decline.”

“The Fed’s work is far from over: expect hikes to continue until negative wages are almost at hand,” said a BofA team led by rates strategist Meghan Swiber.

Moreover, Federal Reserve officials have sent clear messages in recent weeks that they have no plans to back away from aggressive policy intervention.

“We have a long way to go,” Federal Reserve Bank of Chicago President Charles Evans said Thursday. The benchmark rate is likely to be 4.5% to 4.75% Until the spring of 2023. “Inflation is high right now and we need monetary policy to be more restrictive.”

WASHINGTON, DC - JULY 26: Construction workers look at the Marriner S. Eccles Federal Reserve Building on July 26, 2022 in Washington, DC.  Federal Open Market Committee (FOMC) officials are holding a two-day meeting as the Federal Reserve is expected to raise interest rates again this week to fight inflation.  (Photo by Anna Moneymaker/Getty Images)

WASHINGTON, DC – JULY 26: Construction workers look at the Marriner S. Eccles Federal Reserve Building on July 26, 2022 in Washington, DC. (Photo by Anna Moneymaker/Getty Images)

U.S. crude oil futures continued this week’s gains after OPEC+ countries cut production for the biggest time since 2020. DataTrek Research noted that West Texas Intermediate (WTI) crude above $85 will extend positive energy inflation trends at least through early 2023. The firm also noted that oil prices are an “underappreciated fulcrum” for the Federal Reserve and the market’s expectations of near-term economic growth. WTI futures traded at around $89 a barrel on Friday morning.

Elsewhere in the markets, chipmakers were under pressure on Friday morning after Advanced Micro Devices.Oh, my God) lowered its revenue guidance for the third quarter and warned of “significant” inventory adjustments in the PC supply chain. Shares were down about 6% in premarket trading. The sector was also affected Samsung reported its first profit decline since 2019another sign of a troubled chip market.

Levi Strauss (LEVI) moved on Friday after the retailer cut its guidance, citing headwinds from a stronger dollar, slowing consumer demand and ongoing supply chain snafu. The stock was down about 5% in pre-bell trading.

Meanwhile, DraftKing (DKING) rose nearly 8% after Bloomberg News reported Thursday that ESPN is nearing a new major partnership deal citing sources familiar with the deal with the sports betting company.

Alexandra Semenova is a correspondent for Yahoo Finance. Follow him on Twitter @alexandraandnyc

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