Written By
Sheikh Hasib Ahmed
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After the US jobs report exceeded expectations on Friday, US stock futures plunged as investors worried that it would influence the Federal Reserve's decision to leave interest rates steady or raise them.
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After the major indexes gained ground on Thursday, the Dow Jones Industrial Average (DJI) futures were down 0.7%, or around 200 points. The tech-heavy Nasdaq 100 (NDX) futures fell 1.1%, and the S&P 500 (GSPC) futures fell 0.9%.
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The labor market did not exhibit the anticipated indications of weakening in September's jobs report. In September, the US economy created 336,000 new jobs, about twice as many as was predicted.
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That might provide the Fed with more proof that the labor market is still robust, supporting a more stringent policy for a longer period of time.
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Before the bank's upcoming policy meeting, Friday's data is the final significant payroll report.
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The Fed is keeping an eye on the bond markets as well. According to Fed official Mary Daly, if long-term bond yields stay at their current levels, the Fed may not need to raise interest rates again.
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After the jobs report, the explosive rebound in rates continued, with 10-year U.S. Treasury yields (TNX) surging back above 4.8%.
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Given that there isn't a clear catalyst to stop the bleeding, several analysts believe the bond sell-off may likely continue. They think that a decline in rates would require a washout in stocks or a slowdown in the economy.
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Oil prices are on track for their worst weekly decline since March as a result of growth concerns that have weighed on the market.
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On Friday, WTI crude oil futures (CL=F) dropped under $82 per barrel, while Brent crude futures (BZ=F) went under the crucial $84 mark.