(Reuters) – Wall Street’s main indexes were set for a lower open on Friday as a stronger-than-expected jobs data amplified investor concerns over bigger interest rate hikes by the Federal Reserve to tame surging prices.
The Labor Department’s report showed nonfarm payrolls increased by 428,000 jobs last month, while economists polled by Reuters had expected 391,000 job additions.
Unemployment rate remained unchanged at 3.6% in April, while average hourly earnings increased 0.3% against forecast of a 0.4% rise. The data underscored the economy’s strong fundamentals despite a contraction in gross domestic product in the first quarter.
“Certainly if you are sitting there worrying about a recession, at least initially, I don’t think there’s anything in here that would say the economy is in the tank,” said Matthew Tuttle, chief investment officer, Tuttle Capital Management in Greenwich, Connecticut
“The unemployment rate being 3.6% after 12 months in a row of adding over 400,000 jobs, to me that’s an economy that’s cranking. I’m in the camp of ‘worried about a recession'”.
The main indexes plunged on Thursday, reversing all gains from a relief rally on Wednesday, as investors feared bigger rate hikes might be needed as inflation runs at a four-decade high. Traders see 83% chance of a 75 basis point hike at the Fed’s June meeting, despite Fed chief Jerome Powell ruling out such a rate hike.[IRPR]
The Nasdaq tumbled 5%, its biggest one-day percentage decline since June 2020, as rate-sensitive growth stocks were hammered.
The S&P 500 growth index is down nearly 20.3% year-to-date as compared to a 4.9% fall in its value counterpart, which houses economy-sensitive sectors like energy, banks and industrials.
Megacap stocks were mixed on Friday, with Microsoft Corp (NASDAQ:MSFT) down 0.6% in premarket trading.
Wells Fargo (NYSE:WFC) led declines among big banks with a 0.4% fall.
At 9:01 a.m. ET, Dow e-minis were down 174 points, or 0.53%, S&P 500 e-minis were down 27.75 points, or 0.67%, and Nasdaq 100 e-minis were down 120 points, or 0.93%.
Among stocks, DoorDash Inc rose 3.4% as the food delivery firm raised its full-year forecast for core growth target after reporting upbeat quarterly revenue.
Under Armour Inc (NYSE:UAA) slumped 16.0% after the sportswear maker forecast downbeat full-year profit, as it grapples with higher transportation costs and a hit to its business from renewed COVID-19 curbs in China.
Shares of rival Nike Inc (NYSE:NKE) slipped 2.3%.
Source: Economy - investing.com
