Stock futures dip as rates jump on a strong jobs report

Stock futures dip as rates jump on a strong jobs report

Stock futures fell slightly on Friday as investors believe a stronger-than-expected jobs report will likely keep the Federal Reserve on track for its aggressive rate hikes.

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

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

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

“With the set up of a tough Fed on the basis of wanting to aggressively tame inflation with the comfort of a strong labor market … today’s number is especially relevant,” Peter Boockvar, chief investment officer of Bleakley Financial Group, said in a note Friday morning. “If the unemployment rate starts to rise from here, I expect the Fed’s tough talk to be tempered in the months to come.”

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

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

Shares of Levi Strauss gained more than 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 during Thursday’s trading, as the price of oil reversed from a recent dip. Exxon Mobil climbed nearly 3.2%, while Occidental Petroleum added close to 4%. Chipmakers boosted the tech sector after strong earnings from Samsung.

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

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