U.S. stock futures pointed to a second day of losses Monday after an unexpectedly strong jobs report renewed worries about how high the Federal Reserve will have to take interest rates.
What’s happening
Dow Jones Industrial Average futures
YM00,
-0.72%
fell 180 points, or 0.5%, to 33782.
S&P 500 futures
ES00,
-0.89%
dropped 26.5 points, or 0.6%, to 4121.
Nasdaq 100 futures
NQ00,
-1.09%
decreased 99 points, or 0.8%, to 12525.
On Friday, the Dow Jones Industrial Average
DJIA,
-0.38%
fell 128 points, or 0.38%, to 33926, the S&P 500
SPX,
-1.04%
declined 43 points, or 1.04%, to 4136, and the Nasdaq Composite
COMP,
-1.59%
dropped 194 points, or 1.59%, to 12007.
What’s driving markets
There continued to be shock over the 517,000 surge in nonfarm payrolls reported by the Labor Department on Friday.
“On the one hand, a resilient labor market could buttress households’ willingness and ability to continue consuming and therefore support corporate earnings and equities over the near term,” said Rouyaka Ibrahim, an analyst at BCA Research. But longer-term implications are more dire — if a second wave of inflation is triggered, the Fed would have to act more forcefully, perhaps leading to a deep recession, she said.
The yield on the 10-year Treasury
TMUBMUSD10Y,
3.616%
rose 7 basis points to 3.60%.
“January’s payrolls report wasn’t a gamechanger, it was a game-extender. Said differently, the Fed’s messaging regarding how far into restrictive territory policy needs to push and the duration of the stay at such levels is beginning to resonate with investors,” said rates strategists at BMO Capital Markets.
Federal Reserve Chair Jerome Powell will have the opportunity to react on Tuesday when he delivers a speech to the Economic Club of Washington.
Traders also were reacting to the political rift between…
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