Dow Jones, S&P 500, and Nasdaq futures are currently pointing to a higher open on Friday, with stocks likely to see further upside following the notable advance seen in the previous session.
The futures advanced following the release of a closely watched Labor Department report showing employment in the U.S. rose by much less than expected in the month of August.
The report said non-farm payroll employment crept up by 22,000 jobs in August after climbing by an upwardly revised 79,000 jobs in July.
Economists had expected employment to increase by 75,000 jobs compared to the addition of 73,000 jobs originally reported for the previous month.
The report also showed the uptick of 14,000 jobs that had been reported for June was downwardly revised to a decrease of 13,000 jobs.
The Labor Department said job growth in the healthcare and social assistance sector in August was partly offset by job losses in federal government and in mining, quarrying, and oil and gas extraction.
Meanwhile, the Labor Department said the unemployment rate inched up by 4.3 percent in August from 4.2 in July, in line with economist estimates.
While the report adds to recent signs of weakness in the labor market, the data is also likely to increase confidence the Federal Reserve will lower interest rates later this month.
CME Group’s FedWatch Tool is currently indicating a 98.1 percent chance the Fed will lower interest rates by 25 basis points at its September 16-17 meeting.
Stocks moved notably higher over the course of the trading day on Thursday, with the major averages all showing strong moves to the upside after showing a lack of direction early in the session. With the upward move, the S&P 500 ended the day at a new record closing high.
The major averages finished the day just off their highs of the session. The Nasdaq jumped 209.97 points or 1.0 percent to 21,707.69, the S&P 500 advanced 53.82 points or 0.8 percent to 6,502.08 and the Dow climbed 350.06 points or 0.8 percent to 45,621.29.
The strength that emerged on Wall Street came as traders digested the latest U.S. economic data, including a report from payroll processor ADP showing weaker than expected private sector job growth in the month of August.
ADP said private sector employment rose by 54,000 jobs in August after jumping by an upwardly revised 106,000 jobs in July.
Economists had expected private sector employment to rise by 65,000 jobs compared to the addition of 104,000 jobs originally reported for the previous month.
The Labor Department also released a report showing first-time claims for U.S. unemployment benefits rose by more than expected in the week ended August 30th.
The report said initial jobless claims climbed to 237,000, an increase of 8,000 from the previous week’s unrevised level of 229,000. Economists had expected jobless claims to inch up to 230,000.
With the bigger than expected increase, jobless claims reached their highest level since hitting a matching figure in the week ended June 21st.
“We continue to see softness growing in the labor market as tariff policy uncertainty lingers, immigration changes take effect, and AI adoption grows,” said Eric Teal, Chief Investment Officer for Comerica Wealth Management.
He added, “The silver-lining is the weaker the jobs data the more cover there is for stimulative interest rate cuts that are on the horizon.”
Computer hardware stocks moved sharply higher over the course of the session, driving the NYSE Arca Computer Hardware Index up by 3.5 percent to a record closing high.
Substantial strength was also visible among networking stocks, with the NYSE Arca Networking Index surging by 3.2 percent. The index also ended the day at a record closing high.
Ciena (NYSE:CIEN) helped to lead the sector higher, soaring by 23.3 percent after reporting better than expected fiscal third quarter results.
Oil service, housing and retail stocks also saw significant strength on the day, while airline stocks came under considerable selling pressure as the day progressed.