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Stock futures plunge as rates jerk on a strong jobs report

German gas giant Uniper offered a bailout application

July 11, 2022: -On Friday, Stock futures decreased as investors believed a stronger-than-expected jobs report would likely keep the Federal Reserve on track for its aggressive rate increases.

Futures tied to the Dow Jones Industrial Average decreased 60 points5 while S&P 500 futures dipped about 0.2%. Nasdaq 100 futures slipped nearly 0.9%.

Nonfarm payrolls increased 372,000 in June, better than the 250,000 Dow Jones estimate and continuing a strong year for job growth, according to data on Friday from the Bureau of Labor Statistics.

On Thursday, the action in futures followed a disarming session in which the S&P 500 posted a four-day positive streak, reaching its longest year thus far. The index is down 19% from its all-time high in January.

“With the setup of a tough Fed based on wanting to aggressively tame inflation with the comfort of a strong labor market, today’s number is especially relevant,” Peter Boockvar, a chief investment officer of Bleakley Financial Group, said. “If the unemployment rate rises from here, I expect the Fed’s tough talk to be tempered in the coming months.”

The S&P 500 is up 2% in this holiday-shortened week, and it’s on pace for its dual positive week in the previous three.

The Dow Jones Industrial Average and the tech-heavy Nasdaq Composite are up 0.92% and 4.4% this week. Both indexes are on track for their second positive week in the last three.

Shares of Levi Strauss gained over 3% in the premarket after the retailer reported quarterly earnings that exceeded expectations and boosted its dividend.

GameStop fell about 6% in premarket trading as the company fired its chief financial officer and said it would lay off employees as part of a turnaround plan. The stock notched a 15% gain in the prior session after the video game retailer announced a 4-for-1 stock split.

Energy stocks led gains in trading on Thursday as the price of oil reversed from a current dip. Exxon Mobil surged nearly 3.2%, while Occidental Petroleum counted close to 4%. Chipmakers encouraged the tech sector after solid earnings from Samsung.

“You just don’t see the capitulation just yet. I think there’s a little more that needs to happen between now and the July Fed meeting,” Mark Newton, head of technical strategy at Fundstrat, stated on CNBC on Thursday. He said that stocks could pull back as early as Friday’s session.

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Stock futures plunge as rates jerk on a strong jobs report