Dow futures jump after better-than-expected jobs report

Futures for the Dow Jones Industrial Average rose on Friday morning after the July jobs report came in better than economists projected.

Dow futures were higher by 82 points, or 0.2%. S&P 500 futures were up slightly, while futures tied to the Nasdaq 100 dipped.

Friday’s jobs report showed that the U.S. economy added 943,000 jobs in July, according to the Labor Department. Economists expect the economy to have added 845,000 jobs last month, according to estimates from Dow Jones. The unemployment rate dropped to 5.4%.

Brad McMillan, chief investment officer at Commonwealth Financial Network, noted that the monthly readings this year have ranged from 233,000 in January to 850,000 in June. He said a print below 300,000 could be a cause for concern, while a reading between 300,000 and 400,000 would show a “reasonably healthy” economy.

“A better result would be in line with the average for the second quarter, or around 500,000 to 600,000. This would show that the recovery continues and that while the medical and labor issues are preventing further acceleration, the economy still has enough momentum to keep moving forward at a reasonable rate,” he said.

Friday’s report comes after the weekly initial claims number reported on Thursday came in at 385,000, which was in-line with expectations. However, the ADP private payrolls report on Wednesday showed a smaller-than-expected number of jobs added during July.

Wall Street is closely watching Friday’s jobs report given its potential to impact the Federal Reserve’s policy going forward.

“While uncertainty over monetary policy is likely to cause further bouts of volatility, we believe the Fed’s move toward tapering is unlikely to prompt a reversal of the equity rally,” noted strategists at UBS.

“Labor market slack, well anchored inflation expectations, and risks from the delta COVID-19 variant make interest rate increases before 2023 unlikely,” the firm added.

The jobs report also created movement in the bond market. 10-year U.S. Treasury yield continued its recent streak of volatile trading, jumping to 1.27% after the report. The benchmark yield traded at 1.13% earlier this week. Yields move inverse to prices.

Stocks finished Thursday’s session in the green, with the S&P 500 rising 0.6% to close at a new record. The Dow gained 271.58 points, or 0.78%. The Nasdaq Composite also advanced 0.78% for its fourth straight positive session.

A busy week of earnings continues on Friday with several notable reports, including from Canopy Growth, AMC Networks, Draftkings, Norwegian Cruise Line and Goodyear Tire. Additionally, Berkshire Hathaway is on deck for Saturday morning.

Through Thursday afternoon 427 S&P 500 components have posted quarterly results, with 88% topping earnings estimates, according to data from Refinitiv. When it comes to revenue, 87% have exceeded expectations.

For the week, the Dow is up 0.4%. The S&P and Nasdaq are up 0.77% and 1.5%, respectively.