Futures Holding On To Gains Following Stronger Than Expected Jobs Data

(RTTNews) - The major U.S. index futures are currently pointing to a higher open on Friday, with stocks likely to extend the rally seen over the course of the previous session.

The futures held on to earlier gains following the release of a Labor Department report showing U.S. employment surged by much more than expected in the month of May.

The report showed non-farm employment soared by 339,000 jobs in May after spiking by an upwardly revised 294,000 jobs in April.

Economists had expected employment to climb by 190,000 jobs compared to the jump of 253,000 jobs originally reported for the previous month.

Meanwhile, the Labor Department said the unemployment rate rose to 3.7 percent in May from 3.4 percent in April. The unemployment rate was expected to inch up to 3.5 percent.

Stock futures had moved higher earlier in the morning after the Senate voted to pass the bill raising the U.S. debt ceiling late Thursday night.

The Senate voted 63 to 36 in favor of the debt ceiling bill, with 17 Republicans joining with the majority of Democrats to approve the legislation.

Following the House approval of the bill Wednesday night, the bill now heads to President Joe Biden, who is expected to sign the legislation later today.

"No one gets everything they want in a negotiation, but make no mistake: this bipartisan agreement is a big win for our economy and the American people," Biden said in a statement following the Senate vote.

The passage of the bill eliminates the threat of a potentially disastrous default by the U.S. government, which had been hanging over the markets in recent weeks.

Stocks showed a lack of direction in early trading on Thursday but moved notably higher over the course of the session. With the upward move on the day, the Nasdaq and the S&P 500 reached their best closing levels in over nine months.

The major averages pulled back off their highs of the session going into the close but remained firmly positive. The Nasdaq surged 165.70 points or 1.3 percent to 13,100.98, the S&P 500 jumped 41.10 points or 1.0 percent to 4,221.02 and the Dow climbed 153.30 points or 0.5 percent to 33,061.57.

The strength that emerged on Wall Street came after the House voted Wednesday night to approve the bill raising the U.S. debt ceiling.

The House voted 314 to 117 in favor of the Fiscal Responsibility Act, with the legislation attracting support from both Democrats and Republicans.

On the U.S. economic front, payroll processor ADP released a report showing private sector employment in the U.S. jumped by much more than expected in the month of May.

The report said private sector employment shot up by 278,000 jobs in May after surging by a revised 291,000 jobs in April.

Economists had expected private sector employment to increase by 170,000 jobs compared to the spike of 296,000 jobs originally reported for the previous month.

Meanwhile, the Labor Department released a report showing a slight increase in first-time claims for U.S. unemployment benefits in the week ended May 27th.

The report said initial jobless claims crept up to 232,000, an increase of 2,000 from the previous week's revised level of 230,000.

Economists had expected jobless claims to rise to 235,000 from the 229,000 originally reported for the previous week.

The Institute for Supply Management also released a report showing U.S. manufacturing activity contracted at a slightly faster rate in the month of May.

The ISM said its manufacturing PMI slipped to 46.9 in May from 47.1 in April, with a reading below 50 indicating a contraction. Economists had expected the index to edge down to 47.0.

Oil service stocks moved sharply higher over the course of the session, resulting in a 4.0 percent spike by the Philadelphia Oil Service Index. The index bounced off its lowest closing level in over seven months. The rebound by oil service stocks came amid a surge by the price of crude oil.

Substantial strength was also visible among computer hardware stocks, as reflected by the 3.6 percent gain posted by the NYSE Arca Computer Hardware Index.

Pure Storage (PSTG) helped lead the sector higher after the data storage company reported better than expected fiscal first quarter earnings and provided upbeat full-year guidance.

Gold stocks have also showed a strong move to the upside amid an increase by the price of the precious metal, driving the NYSE Arca Gold Bugs Index up by 3.5 percent.

Steel, tobacco, airline and banking stocks also saw considerable strength on the day, while utilities stocks were among the few groups to buck the uptrend.

Commodity, Currency Markets

Crude oil futures are jumping $1.52 to $71.62 a barrel after surging $2.01 to $70.10 a barrel on Thursday. Meanwhile, after climbing $13.40 to $1,995.50 an ounce in the previous session, gold futures are edging down $2 to $1,993.50 an ounce.

On the currency front, the U.S. dollar is trading at 139.18 yen versus the 138.80 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0742 compared to yesterday's $1.0762.

Asia

Asian stocks advanced on Friday after the U.S. Senate passed a bipartisan bill to raise the debt ceiling into 2025 and cut the deficit, the final hurdle for the U.S. to avoid default on its debt.

Hopes of an economic recovery in China and hopes of a pause in the U.S. central bank's tightening policy also boosted investors' appetite for riskier assets.

The dollar fell broadly after Fed Bank of Philadelphia President Patrick Harker said Thursday the U.S. central bank "should at least skip this meeting in terms of an increase."

Gold was unchanged ahead of the all-important U.S. jobs data due later in the day, while oil prices rose over 1 percent to extend overnight gains amid bets on further production cuts by OPEC+ at the producer cartel's meeting on Sunday.

Chinese shares rose on optimism that policymakers would soon deliver the much- needed stimulus to boost growth. The benchmark Shanghai Composite Index climbed 0.8 percent to 3,230.07.

Hong Kong's Hang Seng Index soared 4.0 percent to 18,949.94, led by gains by property developers, tech and consumer stocks.

Tencent Holdings surged 5.8 percent and Alibaba Group Holding jumped 6.5 percent on reports that Nvidia's CEO plans to meet top executives from major Chinese technology firms in June.

Japanese shares rallied to close at a 32-year high after Bank of Japan Governor Kazuo Ueda said the bank is in no hurry to tighten its ultra-loose policy.

The Nikkei 225 Index jumped 1.2 percent to 31,524.22, while the broader Topix Index ended 1.6 percent higher at 2,182.70.

Tech investor SoftBank Group surged 4.3 percent on speculation that its chip unit will benefit from a boom in artificial intelligence investment. T&D Holdings jumped 4.3 percent as US. debt default worries receded.

Seoul stocks closed at a one-year high after revised data showed the country's economy grew slightly more than expected in the first quarter and inflation eased for a fourth consecutive month in May to the lowest in 19 months. The Kospi gained 1.3 percent to close at 2,601.36.

Australian markets rose in cautious trading ahead of a RBA policy meeting next week. The benchmark S&P/ASX 200 Index climbed 0.5 percent to 7,145.10 as miners surged on optimism over China.

The broader All Ordinaries Index rose 0.6 percent to 7,331.20. BHP, Rio Tinto and Fortescue Metals Group jumped 2-3 percent.

Europe

European stocks traded sharply higher on Friday, with Fed pause hopes and easing U.S. debt default worries helping underpin sentiment.

On a light day on the economic front, data showed French industrial production rebounded in April, led by a sharp recovery in petroleum output.

Industrial output logged a monthly increase of 0.8 percent, reversing the 1.1 percent decrease in March. Production was expected to climb 0.3 percent.

While the French CAC 40 Index has jumped by 1.1 percent, the German DAX Index and the U.K.'s FTSE 100 Index are both up by 0.8 percent.

Ryanair Holdings has moved to the upside after the Irish airline said its monthly traffic hit a record high in May.

Higher copper prices have lifted miners, with Anglo American, Antofagasta and Glencore posting substantial gains.

Dechra Pharmaceuticals has also soared after it agreed to be taken over in a £4.46 billion deal.

PayPoint, an ecommerce services provider, has also surged after reiterating its guidance for the full year.

German sportswear maker Puma and peer Adidas have also rallied after U.S. retailer Lululemon Athletica posted strong results for its latest quarter and raised its annual sales and profit forecasts.

ProSiebenSat.1 has also moved notably higher after Czech investment group PPF raised its stake in the media group.

U.S. Economic Reports

The Labor Department released its closely watched monthly jobs report on Friday, showing U.S. employment surged by much more than expected in the month of May.

The report showed non-farm employment soared by 339,000 jobs in May after spiking by an upwardly revised 294,000 jobs in April.

Economists had expected employment to climb by 190,000 jobs compared to the jump of 253,000 jobs originally reported for the previous month.

Meanwhile, the Labor Department said the unemployment rate rose to 3.7 percent in May from 3.4 percent in April. The unemployment rate was expected to inch up to 3.5 percent.

Stocks In Focus

Shares of MongoDB (MDB) are skyrocketing in pre-market trading after the data developer platform reported better than expected fiscal first quarter results and provided upbeat guidance.

Athletic apparel company Lululemon (LULU) is also seeing substantial pre-market strength after reporting fiscal first quarter results that exceeded analyst estimates and raising its full-year outlook.

On the other hand, shares of SentinelOne (S) are likely to see an initial nosedive after the cybersecurity company reported weaker than expected fiscal first quarter revenues and lowered its full-year revenue forecast.