U.S. Stocks May Extend Pullback Following Monthly Jobs Report

Stocks may move to the downside in early trading on Friday, extending the pullback seen over the two previous sessions. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.8 percent.

The futures came under pressure following the release of the Labor Department’s closely watched monthly jobs report, which showed U.S. job growth slowed in the month of September but still came in slightly stronger than economists had anticipated.

The report showed non-farm payroll employment jumped by 263,000 jobs in September after surging by an unrevised 315,000 jobs in August. Economists had expected employment to leap by 250,000 jobs.

The Labor Department also said the unemployment rate dipped to 3.5 percent in September from 3.7 percent in August. The unemployment rate was expected to come in unchanged.

The unemployment rate matched its lowest level since just before Covid-19 lockdowns began to take effect in February of 2020, which was also matched in July.

Treasury yields have surged following the release of the report, potentially reflecting expectations the unexpected drop in the unemployment rate will convince the Federal Reserve to continue with its aggressive interest rate hikes.

A sales warning from Advanced Micro Devices (AMD) may also weigh on the markets, with the chipmaker slumping by 6.0 percent in pre-market trading.

AMD warned of third quarter revenue well below its previous guidance due to a weaker than expected PC market and significant inventory correction actions across the PC supply chain.

Not long after the start of trading, the Commerce Department is scheduled to release its report on wholesale inventories in the month of August. Wholesale inventories are expected to jump by 1.1 percent.

Stocks fluctuated over the course of the trading session on Thursday but largely maintained a negative bias throughout the day. The major averages added to the modest losses posted on Wednesday but remained well off last Friday’s lows.

The major averages all finished the day firmly in the red. The Dow tumbled 346.93 points or 1.2 percent to 29,926.94, the Nasdaq slid 75.33 points or 0.7 percent to 11,073.31 and the S&P 500 slumped 38.76 points or 1.0 percent to 3,744.52.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan’s Nikkei 225 Index fell by 0.7 percent, while Hong Kong’s Hang Seng Index dove by 1.5 percent.

Meanwhile, European stocks have moved mostly lower on the day. While the U.K.’s FTSE 100 Index is nearly unchanged, the German DAX Index is down by 0.5 percent and the French CAC 40 Index is down by 0.6 percent.

In commodities trading, crude oil futures are jumping $1.31 to $89.76 a barrel after climbing $0.69 to $88.45 a barrel on Thursday. Meanwhile, after ending the previous session unchanged at $1,720.80 an ounce, gold futures are edging down $2 to $1,718.80 an ounce.

On the currency front, the U.S. dollar is trading at 145.18 yen versus the 145.14 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $0.9753 compared to yesterday’s $0.9791.

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