The major U.S. index futures are currently pointing to a higher open on Friday, with stocks likely to extend the significant rebound seen during the previous session.
The markets may benefit from a positive reaction to earnings news from Facebook parent Meta Platforms (META) and online retail giant Amazon (AMZN).
Shares of Meta are spiking by 16.8 percent in pre-market trading after the company reported better than expected fourth quarter results, announced its first-ever quarterly dividend and authorized a $50 billion share buyback.
Amazon has also surged by 6.8 percent in pre-market trading after reporting fourth quarter results that exceeded analyst estimates on both the top and bottom lines.
On the other hand, shares of Apple (AAPL) have slumped by 3.4 percent in pre-market trading after the tech giant better than expected fiscal first quarter earnings but provided guidance for the current quarter that hinted at weak iPhone sales.
The major index futures also gave back ground following the release of a Labor Department report showing much stronger than expected job growth in the month of January.
The report said non-farm payroll employment spiked by 353,000 jobs in January compared to economist estimates for an increase of about 180,000 jobs.
Job growth in November and December was also upwardly revised to 182,000 jobs and 333,000 jobs, respectively, reflecting a net upward revision of 126,000 jobs.
The much stronger than expected job growth in January partly reflected a significant increase in employment in the healthcare and social assistance sector, which jumped by 100,400 jobs.
Employment in the professional and business services and retail sectors also saw notable growth, while employment declined in the mining, quarrying, and oil and gas extraction industry.
Meanwhile, the Labor Department said the unemployment rate in January came in unchanged from the previous month at 3.7 percent. Economists had expected the unemployment rate to inch up to 3.8 percent.
The data may add to concerns about the outlook for interest rates after the Federal Reserve signaled on Wednesday that it is unlikely to cut rates in March.
Following the sell-off seen in Wednesday’s session, stocks showed a strong move back to the upside during trading on Thursday. The major averages fluctuated early in the session but climbed firmly into positive territory as the day progressed.
The major averages finished the session near their best levels of the day. The Dow jumped 369.54 points or 1.0 percent to 38,519.84, the Nasdaq surged 197.63 points or 1.3 percent to 15,361.64 and the S&P 500 shot up 60.54 points or 1.3 percent to 4,906.19.
The rebound on Wall Street came as some traders saw the sell-off on Wednesday as a buying opportunity amid optimism the markets will resume the upward trend seen throughout much of January.
While the Federal Reserve’s signals that an interest rate cut in March is unlikely contributed to Wednesday’s nosedive, economists continue to believe it is a matter of “when, not if” the central bank will eventually lower rates.
CME Group’s FedWatch Tool is currently indicating a relatively modest 34.5 percent chance of a March rate cut but a nearly 100 percent chance rates will be lower by early May.
A continued decrease by treasury yields may also have contributed to the buying interest, with the yield on the benchmark ten-year note falling to its lowest levels in over a month.
In U.S. economic news, the Labor Department released a report showing first-time claims for U.S. unemployment benefits unexpectedly saw a modest increase in the week ended January 27th.
The Labor Department said initial jobless claims rose to 224,000, an increase of 9,000 from the previous week’s revised level of 215,000. Economists had expected jobless claims to edge down to 212,000 from the 214,000 originally reported for the previous week.
On Friday, the Labor Department is scheduled to release its more closely watched report on employment in the month of January.
Economists currently expect employment to increase by 180,000 jobs in January after jumping by 216,000 jobs in December, while the unemployment rate is expected to inch up to 3.8 percent from 3.7 percent.
Meanwhile, a reading on U.S. manufacturing activity unexpectedly increased in the month of January but continues to indicate contraction, according to a report released by the Institute for Supply Management on Thursday.
The ISM said its manufacturing PMI rose to 49.1 in January from a downwardly revised 47.1 in December. While a reading below 50 still indicates contraction, economists had expected the index to edge down to 47.0 from the 47.4 originally reported for the previous month.
With the unexpected increase, the manufacturing PMI reached its highest reading since hitting 50.0 in October 2022.
Gold stocks showed a substantial move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 3.8 percent. The rally by gold stocks came amid a modest increase by the price of the precious metal.
Considerable strength was also visible among computer hardware stocks, as reflected by the 2.7 percent gain posted by the NYSE Arca Computer Hardware Index.
Retail, airline and housing stocks also showed strong moves to the upside, while banking stocks saw significant weakness, dragging the KBW Bank Index down by 1.7 percent.