US Futures Lower After Record Highs for Dow Jones, S&P500

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Principal Points

• Equity futures on Monday trade mildly below the flatline, after fresh records on Friday
• The latest jobs report showed the US labor market expanded by nearly 950,000 new hirings

Stock futures on Wall Street were flat to negative in pre-market ahead of the regular session on Monday. Futures contracts tied to the Dow Jones Industrial Average were lower by roughly 0.25%, while S&P500 futures and Nasdaq futures were down by about 0.20%, and 0.15%, respectively.

Major averages today are looking to open rather muted after Friday’s market action brought the Dow Jones and the S&P500 to record closing levels. The continued push to the upside on Friday came as investors digested the latest jobs report.

Stellar, better-than-expected employment figures released by the Labor Department solidified expectations for a sustained economic expansion. The US job market, as per the latest nonfarm payrolls report, added 943,000 new positions in July, the biggest gain in nearly a year. The unemployment rate, on the other hand, fell by 0.5%, to 5.4%. The unemployment rate now sits at the lowest level since the pandemic took hold in March 2020.

The strongest sectors that gained the most in July were leisure and hospitality, as well as professional and business services. The leisure and hospitality industry, which includes restaurants and cafes, added 380,000 jobs. The report served as proof that the economy is weathering the coronavirus threats and it continues to grow despite higher inflation pressures.

Positive Economic Results Propel Confidence

Pent-up consumer demand, business reopenings, and consistent monetary stimulus by the Federal Reserve have acted as strong tailwinds for the swift economic rebound in the first month of the third quarter of the year.

As the latest jobs data-inspired confidence in investors and added to the already positive economic prospects, Wall Street stocks finished Friday mostly higher. The Dow Jones Industrial Average climbed 144.26 points, or 0.41%, to finish at a fresh record of 35,208.51. The S&P500 gained modestly by adding 7.42 points, or 0.17%, to close at 4,436.52, its 44th record-high close of 2021. The Nasdaq Composite fell 59.36 points, or 0.40%, to end the session at 14,835.76.

The continued job growth, as seen in the last few months, is likely to speed up tapering discussions at the Federal Reserve. The US central bank has previously mentioned it would need more months of economic data before it could decide when to start reducing its $120bn in monthly asset purchases.

Meanwhile, European stocks today are trading mostly in the green as investors aim to continue the upside swing from last week. On Friday, the pan-European Stoxx 600 surged to a new record, fueled by strong earnings reports, particularly from the bank sector. On Monday, as European bourses are kicking into gear, the region-wide benchmark index floats right above the 470 milestones.

In cryptocurrency action, major digital tokens today are trading relatively muted and to the downside. Ether, which has outperformed bitcoin in recent weeks, is now hovering around $3,000 after the major

London upgrade was a success. Bitcoin is struggling to the upside as it trades near the flatline, currently at $43,700 per coin.

Gold and silver endured a massive selloff in the early hours of the Asian trading session. Gold slipped by over 5%, while silver tumbled almost 10% as investors panic-sold the assets for no clear reason except brighter economic prospects for the US, as suggested by the jobs report. Both gold and silver recouped their losses shortly after the steep decline.