U.S. Stocks May Move Back To The Upside In Early Trading

The major U.S. index futures are currently pointing to a higher open on Friday, with stocks likely to regain ground following the sell-off seen late in the previous session.

Traders may look to pick up stocks at relatively reduced levels following the steep drop seen during Thursday’s session, which dragged the Dow down to its lowest closing level in a month.

The futures have seen further upside following the release of a report from the Labor Department showing much stronger than expected job growth in the month of March.

The Labor Department said non-farm payroll employment spiked by 303,000 jobs in March after surging by a downwardly revised 270,000 jobs in February.

Economists had expected employment to jump by 200,000 jobs compared to the addition of 275,000 jobs originally reported for the previous month.

The report also said the unemployment rate edged down to 3.8 percent in March from 3.9 percent in February, while economists had expected the unemployment rate to come in unchanged.

While the stronger than expected job growth may add to recent concerns about the outlook for interest rates, the report also showed a continued slowdown in the annual rate of wage growth.

The Labor Department said the annual rate of wage growth slowed to 4.1 percent in March from 4.3 percent in February, in line with estimates.

Stocks turned in a strong performance throughout much of the trading day on Thursday but came under substantial pressure in the latter part of the session. The major averages plummeted in the final two hours of trading, ending the day sharply lower.

The major averages saw continued weakness going into the close, finishing the session nearly their worst levels of the day. The Nasdaq tumbled 228.38 points or 1.4 percent to 16,049.08, while the S&P 500 slumped 64.28 points or 1.2 percent to 5,147.21.

After surging nearly 300 points in early trading, the Dow plunged 530.16 points or 1.4 percent to 38,596.98, closing lower for the fourth straight session.

The late-day sell-off on Wall Street came amid a continued surge by the price of crude oil, which advanced for the fifth straight session and reached its highest levels since last October.

Crude for May delivery jumped $1.16 to $86.59 a barrel, raising concerns higher energy prices will keep inflation elevated and convince the Federal Reserve to hold off on lowering interest rates.

Negative sentiment was also generated in reaction to comments by Minneapolis Fed President Neel Kashkari, who suggested in an interview with Pensions & Investments that the central bank might not cut rates at all this year if inflation continues moving sideways.

Earlier in the session, stocks benefited from a positive reaction to a Labor Department report showing first-time claims for U.S. unemployment benefits rose by more than expected in the week ended March 30th.

The report said initial jobless claims climbed to 221,000, an increase of 9,000 from the previous week’s revised level of 212,000.

Economists had expected jobless claims to inch up to 214,000 from the 210,000 originally reported for the previous week.

With the bigger than expected increase, jobless claims reached their highest level since hitting 225,000 in the week ended January 27th.

The advance by jobless claims generated some optimism about the outlook for interest rates, although the likelihood of a rate cut in June remains uncertain.

Semiconductor stocks moved sharply lower over the course of the session, dragging the Philadelphia Semiconductor Index down by 3.0 percent.

Shares of AI darling Nvidia (NVDA) plunged by 3.4 percent after jumping as much as 1.9 percent early in the trading day.

Considerable weakness also emerged among housing stocks, as reflected by the 1.6 percent loss posted by the Philadelphia Housing Sector Index.

Gold stocks also saw significant weakness as the price of the precious metal snapped a seven-session winning streak, with the NYSE Arca Gold Bugs Index falling by 1.6 percent.

Computer hardware, brokerage and healthcare stocks also came under pressure as the day progressed, moving lower along with most of the other major sectors.

Commodity, Currency Markets

Crude oil futures are inching up $0.06 to $86.65 a barrel after jumping $1.16 to $86.59 a barrel on Thursday. Meanwhile, after falling $6.50 to $2,308.50 an ounce in the previous session, gold futures are edging down $0.50 to $2,308 an ounce.

On the currency front, the U.S. dollar is trading at 151.70 yen versus the 151.34 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0806 compared to yesterday’s $1.0837.

Asia

Asian stocks tracked overnight declines on Wall Street to end lower on Friday as hawkish comments from a trio of Fed policymakers as well as rising oil prices spurred more uncertainty about the outlook for U.S. interest rates.

Gold fell from record highs as the dollar strengthened ahead of key jobs data due later in the day and inflation reports out next week. Oil headed for a second weekly gain due to a worsening conflict in the Middle East.

Israel’s military was kept on full alert in anticipation of a potential retaliatory strike from Iran following its strike on an Iranian compound in Syria.

Financial markets in mainland China were closed for a public holiday. Hong Kong’s Hang Seng Index ended little changed at 16,723.92 after a choppy session as traders returned from a holiday on Thursday.

Japanese stocks slumped as rate concerns weighed on the tech sector and the yen rebounded from recent losses to a two-week high on concerns that sticky inflation could elicit more interest rate hikes by the Bank of Japan.

The Nikkei 225 Index plunged 2.0 percent to 38,992.08, setting a three-week low. The broader Topix Index settled 1.1 percent lower at 2,702.62.

Seoul stocks ended lower, with the Kospi slumping 1.0 percent to 2,714.21. Heavyweight Samsung Electronics fell nearly 1 percent despite forecasting a more than 10-fold rise in its first-quarter operating profit.

Australian markets ended lower, weighed down by losses in the banking and mining sectors. The benchmark S&P ASX 200 Index dropped 0.6 percent to 7,773.30 as data showed Australia’s trade balance hit a five-month low in February as a result of a decline in iron ore exports. The broader All Ordinaries Index slid 0.6 percent to 8,026.

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 Index ended down 0.2 percent at 12,012.24 ahead of a central bank meeting next week, with economists expecting the central bank to leave its key interest rates unchanged for a sixth consecutive meeting.

Europe

European stocks have fallen to more than two-week lows on Friday and are on track for a weekly decline, as hawkish comments from Federal Reserve officials and rising oil prices as a result of escalating tensions in the Middle East have dented investors’ appetite for riskier assets.

In economic news, German factory orders posted a monthly increase of 0.2 percent in February, in contrast to the revised 11.4 percent decline in January, data from Destatis showed earlier today.

French industrial output rose 0.2 percent on a monthly basis in February following January’s 0.9 percent decline, statistical office INSEE reported. The expected growth rate was 0.5 percent.

U.K. house prices dropped 1.0 percent on a monthly basis in March, in contrast to the 0.3 percent rise in February, data published by the mortgage lender Halifax showed. This was the first decrease since September.

Eurozone’s retail sales dropped by 0.7 percent year-on-year in February following a 0.9 percent decline in January, Eurostat reported.

While the U.K.’s FTSE 100 Index has slid by 0.9 percent, the German DAX Index and the French CAC 40 Index are both down by 1.5 percent.

Travel and leisure stocks have slumped as Brent crude futures climbed past $91 a barrel mark on supply disruption risks amid heightened tensions in the Middle East.

Delivery Hero has also tumbled after reports that activist investor Sachem Head has built a 3.6 percent stake in the online food takeaway company and is seeking a seat on the supervisory board.

Global information services company Experian has also fallen. The company has agreed to acquire illion, a consumer and commercial credit bureau in Australia and New Zealand, for a total consideration of up to A$820 million or US$532 million.

AstraZeneca has also moved to the downside despite reporting positive results for its blockbuster cancer drug Imfinzi in a late-stage trial.

Swiss IT firm SoftwareOne Holding shares has also slid after all proxy advisors opposed the complete replacement of the firm’s board of directors.

Meanwhile, Finnish oil refining company Neste has moved sharply higher after announcing a major maintenance shutdown at its Porvoo refinery.

U.S. Economic Reports

A closely watched report released by the Labor Department on Friday showed employment in the U.S. shot up by much more than expected in the month of March.

The Labor Department said non-farm payroll employment spiked by 303,000 jobs in March after surging by a downwardly revised 270,000 jobs in February.

Economists had expected employment to jump by 200,000 jobs compared to the addition of 275,000 jobs originally reported for the previous month.

The report also said the unemployment rate edged down to 3.8 percent in March from 3.9 percent in February, while economists had expected the unemployment rate to come in unchanged.

At 9:15 am ET, Richmond Federal Reserve President Thomas Barkin is scheduled to speak before the Greater Baltimore Committee “Pulse Check: The Scorecard Summit 2024.”

Dallas Federal Reserve President Lorie Logan is due to speak before an event hosted by the Duke University Department of Economics at 11 am ET.

At 12:15 pm ET, Federal Reserve Board Governor Michelle Bowman is scheduled to speak on “Risks and Uncertainty in Monetary Policy: Current & Past Considerations” before the Shadow Open Market Committee Spring Meeting.

The Federal Reserve is due to release its report on consumer credit in the month of February at 3 pm ET. Consumer credit is expected to increase by $15.0 billion.

Stocks In Focus

Shares of Krispy Kreme (KKD) are seeing significant pre-market strength after Pipe Sandler upgraded its rating on the doughnut chain’s stock to Overweight from Neutral.

Medical device maker Shockwave Medical (SWAV) is also likely to move to the upside after agreeing to be acquired by Johnson & Johnson (JNJ) for $335.00 per share in cash.

On the other hand, shares of Altice USA (ATUS) may come under pressure after Walls Fargo downgraded its rating on the cable television company’s stock to Underweight from Equal Weight.