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Market Snapshot: Dow futures rise 260 points ahead of week’s final test for stock market — Friday’s jobs report

U.S. stock-index futures point to solid gains on Friday, as investors look toward a labor-market report that could reflect soaring unemployment even as the data signal a decelerating pace of job losses in coronavirus-stricken America. Read More...

U.S. stock-index futures pointed to solid gains Friday, as investors look to a labor-market report that could reflect soaring unemployment even as the data signals a decelerating pace of job losses in coronavirus-stricken America.

How are benchmarks performing?

Futures for the Dow Jones Industrial Average YM00, +1.09% YMM20, +1.09% were up 255 points, or 1%, at 26,508, those for the S&P 500 ES00, +0.70% ESM20, +0.70% were up 18.25 points, or 0.6%, at 3,128.75, while Nasdaq-100 futures NQ00, +0.27% NQM20, +0.27% were 20.75 points, or 0.2%, higher at 9,647.

On Thursday, the Dow DJIA, +0.04% ended 11.93 points, or less than 0.1%, higher at 26,281.82. The fourth straight gain matches a similar streak of wins for the blue-chip index ended April 27, according to FactSet data. Meanwhile, the S&P 500 SPX, -0.33% fell 10.52 points, or 0.3%, to close at 3,112.35 and the Nasdaq Composite Index COMP, -0.69% finished 67.10 points, or 0.7%, lower to wrap up the session at 9,615.81, putting the index about 2.1% from its Feb. 19 all-time closing high. Both the S&P 500 and the Nasdaq ended a win streak at four consecutive days with the session’s loss.

For the week, the Dow is up 3.5%, the S&P 500 is up 2.3% and the Nasdaq is on pace for a weekly gain of 1.3%, as of Thursday’s close.

What’s driving the market?

Investors face one final test of a bullish rally that has been under way in U.S. equity markets over the past few weeks.

Economists predict the official unemployment rate will climb to 19% in May, a MarketWatch survey shows, though some think it could approach as high as 25% unofficially. At that level it could approach the worst levels since the Great Depression.

Friday’s nonfarm-payroll report could show that 7.25 million U.S. jobs were lost in May, after 20 million were lost in April due to the COVID-19 pandemic.

“With certain sections of the US economy slowly reopening, there is a hope that we could start to see the unemployment rate start to plateau as more and more people return to work after being furloughed,” wrote Michael Hewson, chief market analyst at CMC Markets UK, in a Friday research note.

The jobs report will be released at 8:30 a.m. Eastern.

Stimulus measures to limit the economic harm from closures have helped to support stock prices since touching lows in March. Talk of additional funds could also deliver a fresh fillip to the risk assets, with Bloomberg News reporting that the Trump administration is considering a proposal that would see $1 trillion or more in a further round of economic stimulus that could include funds for infrastructure spending. Still, it is unlikely that such measures would occur until later in the summer, if at all, as lawmakers go on a recess.

The U.S. government has injected some $3 trillion in stimulus into the economy, while the Federal Reserve’s balance sheet rose to $7.21 trillion as of June 3, amid efforts to mitigate the severity of the economic downturn wrought by forced closures intended to limit COVID-19’s spread.

Those measures have been often cited as one of the key reasons that provided a runway for stocks to climb from the depths of the coronavirus selloff.

Outside of the labor-market report, a report on consumer credit for April will be released at 3 p.m. Eastern.

Which stocks are in focus?
How are other assets trading?

Oil prices climbed Friday morning as OPEC+ set a tentative date for a meeting. West Texas Intermediate crude for July delivery CLN20, +2.21% headed 89 cents, or 2.4%, higher to $38.30 a barrel on the New York Mercantile Exchange.

In precious metals, August gold GCM20, -0.98% on Comex shed $18.50, or 1.1%, to reach $1,708.90 an ounce.

In global equities, the Stoxx Europe 600 index SXXP, +0.94% rose 1%, while the FTSE 100 index UKX, +0.94% added 0.9%.

In Asia, Japan’s Nikkei NIK, +0.74% rose 0.7%, the China CSI 300 000300, +0.47% finished 0.4% higher and Hong Kong’s Hang Seng Index HSI, +1.65% rose 1.8%. South Korea’s Kospi index 180721, +1.42% gained 1.4%.

The 10-year Treasury note yield TMUBMUSD10Y, 0.860% added 4.2 basis points to 0.85%, according to Dow Jones Market Data. Bond prices move in the opposite direction of yields.

The greenback gained 0.2% against its major rivals, gauged by the ICE U.S. Dollar index DXY, +0.16%.

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