(Reuters) – U.S. stock indexes were set for a higher open on Friday after stronger-than-expected March jobs data pointed to resilience in the labor market even as it meant the Federal Reserve would be in no rush to cut interest rates.
A Labor Department report showed nonfarm payrolls increased by 303,000 jobs in March compared with expectations for an increase of 200,000, as per economists polled by Reuters.
The unemployment rate stood at 3.8% compared with expectations that it would remain steady at 3.9%, while average wages earned rose 0.3% on a monthly basis, in line with estimates.
“The meaningful data point … is average hourly earnings, which have now fallen down to 4.1% year over year, which is the lowest level since June of 2021,” said David Waddell, CEO and chief investment strategist at Waddell & Associates.
“So the employment report was hot, but it was a cooling inflation report and that’s why the market can digest it .. this doesn’t really change anything.”
Money markets are now pricing in about 56% chance of at least a 25 basis point rate cut from the central bank in June, down from about 60% prior to the data release, according to the CME FedWatch tool.
The Friday report followed a broader market selloff in the previous session, when all three major stock indexes fell more than 1% after hawkish comments from Fed officials.
Minneapolis Fed Bank President Neel Kashkari said while he had penciled in two rate cuts for this year at the U.S. central bank’s meeting last month, none may be required if inflation continues to elude the Fed’s target.
Investors will be now looking for more clues on the monetary policy in comments from Fed Governor Michelle Bowman, Dallas Fed President Lorie Logan and Richmond Fed President Thomas Barkin, scheduled to speak during the day.
Mounting tensions in the Middle East, with oil prices extending their gains amid supply disruption concerns, is another area of concern for the markets. [O/R]
A slew of mixed economic data during the week, such as the soft services activity report, the stronger manufacturing report and comments from policymakers have pressured equities, with all three indexes heading for weekly losses.
At 8:51 a.m. ET, Dow e-minis were up 85 points, or 0.22%, S&P 500 e-minis were up 16.5 points, or 0.32%, and Nasdaq 100 e-minis were up 68.25 points, or 0.38%.
Krispy Kreme gained 5.4% in premarket trading after Piper Sandler upgraded the doughnut chain to “overweight” from “neutral”.
Chipmaker Advanced Micro Devices (NASDAQ:AMD) rose 1.0%, recouping some losses after shedding over 8% on Thursday. The Philadelphia Semiconductor Index fell about 3% in the last session.
Shockwave Medical (NASDAQ:SWAV) gained 1.7% after Johnson & Johnson (NYSE:JNJ) agreed to buy the medical device maker for $12.5 billion.
Source: Economy - investing.com
