Oil prices slide to three-week lows on worries about U.S. output after Trump withdraws from Paris accord
Fresh records were in the offing for Wall Street on Friday, with U.S. stock futures climbing on investor optimism that key jobs data will confirm strength in the U.S. economy and encourage gains for equities.
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Dow Jones Industrial Average futures jumped 77 points, or 0.4%, to 21,209, while S&P 500 futures added 5.40 points, or 0.2% to 2,435. Nasdaq-100 futures gained 18.75 points, or 0.3%, to 5,840.75.
A strong reading on private-sector employment on Thursday boosted confidence in the U.S. economy, which in turn helped drive stocks to record closes across all major indexes (http://www.marketwatch.com/story/us-stocks-on-track-to-edge-higher-rebounding-from-two-day-dip-2017-06-01). The S&P 500 index closed up 0.8% at 2,430.06, the Dow industrials surged 0.7% to end at 21,144.18, and the Nasdaq Composite Index climbed 48.31 points to finish at 6,245.83.
Read:The S&P 500 has never had a down year after a start like 2017 (http://www.marketwatch.com/story/the-sp-500-has-never-had-a-down-year-after-a-start-like-2017-2017-05-31)
Still, the weekly gains for the indexes were looking modest. Both the Nasdaq and the S&P 500 were set to rise 0.6% with one session left to go, and the DJIA was poised to gain 0.3%.
Jobs data in the spotlight: After the boost from surprisingly strong private-sector employment numbers, investors will be watching for the nonfarm-payrolls data due at 8:30 a.m. Eastern Time. Economists surveyed by MarketWatch are forecasting 185,000 jobs were created last month.
Read: May hiring gains to reflect warming, but not sizzling economy (http://www.marketwatch.com/story/the-economy-seems-frozen-in-time-but-underneath-the-ice-the-water-is-warming-2017-05-28)
The unemployment rate is expected to hold steady at 4.4%, while average hourly earnings are seen rising 0.2% from a 0.3% gain in the prior month.
"If there were an Achilles' heel to this unstoppable bull market run, it would be an hourly earnings jump in today's U.S. jobs report," said Joel Kruger, currency strategist at LMAX Exchange, in emailed comments.
"Anything above forecast would put the Fed in the more uncomfortable position of needing rather than wanting to raise rates (on a fear of falling behind inflation), something that would also force investors to consider less attractive valuations with rates on the rise," he said.
Bank of America Merrill Lynch reported that for the week ending May 31, investors poured $7.5 billion into U.S. equities, the biggest inflow in five weeks.
The Fed is widely expected to raise interest rates at its two-day policy meeting ending June 14, with the CME FedWatch tool (http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html) pointing to a 91.2% chance of such an increase. Kruger said the market expects just one more hike this year, and the U.S. central bank will likely only hike two or more times if data keeps coming in strong and hourly earnings move up.
Other markets: Oil prices fell to three-week lows (http://www.marketwatch.com/story/oil-prices-stay-weak-as-investors-return-to-worries-over-rising-production-2017-06-02) on Friday, partly driven by concerns that President Donald Trump's decision to withdraw (http://www.marketwatch.com/story/trump-today-president-withdraws-us-from-paris-climate-agreement-and-says-he-wants-fair-deal-2017-06-01) the U.S. from the Paris Climate Accord will lead to an increase in U.S. oil output.
Wall Street's optimism spread across the globe Friday. The Nikkei 225 index closed above the key 20,000 level, adding 1.6% as the Japanese yen eased against the dollar . European stocks were headed for a two-week high (http://www.marketwatch.com/story/european-stocks-head-for-2-week-high-with-investors-hopeful-about-key-us-jobs-data-2017-06-02), and the FTSE 100 was on track for a record (http://www.marketwatch.com/story/ftse-100-on-track-for-all-time-high-as-us-records-lift-trading-mood-2017-06-02).
Gold prices continued to fall in the wake of Thursday's labor market data, which provided support for the dollar, but soured investor appetite for the precious metal. (http://www.marketwatch.com/story/this-is-the-most-recommended-us-stock-2017-06-02)
Individual stocks:Hovnanian Enterprises Inc. (HOV) is scheduled to report earnings ahead of the open on Friday.
Shares of Lululemon Athletica Inc.(LULU) shot up 15% in premarket action after the apparel-maker posted first-quarter results that beat expectations (http://www.marketwatch.com/story/lululemon-shares-rally-10-after-company-earnings-ivivva-restructuring-plans-2017-06-01) and announced a shake-up of its Ivivva brand, late Thursday.
Shares of RH Inc.(RH) sank 22% in premarket trading. The retail chain formerly known as Restoration Hardware cut its earnings outlook for the year (http://www.marketwatch.com/story/restoration-hardware-plunges-more-than-20-after-cutting-earnings-forecast-2017-06-01).
(http://www.marketwatch.com/story/restoration-hardware-plunges-more-than-20-after-cutting-earnings-forecast-2017-06-01)Opinion: This is the most recommended stock (http://www.marketwatch.com/story/this-is-the-most-recommended-us-stock-2017-06-02)
(END) Dow Jones Newswires
June 02, 2017 07:33 ET (11:33 GMT)