U.S. stock futures rallied on Friday after the all-important jobs data came in much stronger than economists expected.
Futures tied to the Dow Jones Industrial Average gained 201 points, or 0.5%. S&P 500 futures and Nasdaq 100 futures climbed 0.7% and 1%, respectively.
Nonfarm payrolls grew by 254,000 jobs in September, far outpacing the forecasted gain of 150,000 from economists polled by Dow Jones. The unemployment rate ticked down to 4.1% despite expectations for it to hold steady at 4.2%.
Friday’s premarket advances mark a turn after mounting geopolitical tensions in the Middle East gave way to a shaky start in October for the stock market. Friday’s report appeared to shift investor focus back to the outlook for the U.S. economy.
“After a summer of weak labor data readings, this is a reassuring reading that the U.S. economy remains resilient, supported by a healthy labor market,” said Michelle Cluver, head of ETF model portfolios at Global X. “We remain in an environment where good economic news is good news for the equity market as it increases the potential for a soft landing.”
With Friday’s gain, major averages could claw back losses for this week. The S&P 500 is off 0.7% week to date, as is the Dow. The Nasdaq is on track for a loss of 1.1% in the period.
Crude prices rose another 1.6% on Friday, adding to the 5% jump seen in the previous day. Oil has been pushed higher as a result of intensifying conflict in the Middle East after Iran launched a missile attack on Israel. Week to date, the price has risen nearly 9%.
Energy prices have taken an idiosyncratic leg higher this week as oil rallied, with the S&P 500 sector up 5.9%. With that, the sector is on pace to notch its biggest weekly gain in more than a year.
To be sure, one overhang has been removed after a closely watched port strike ended Thursday night, as the International Longshoremen’s Association and the United States Maritime Alliance reached a tentative agreement on wages. The parties also agreed to extend their existing contract into January to allow more time for further negotiations.
