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U.S. STOCK FUTURES ADD TO GAINS, YIELDS RISE, AFTER LATEST JOBS DATA

The main U.S. equity index futures are higher after the release of the latest data on U.S. employment. E-mini S&P 500 futures EScv1 are now up around 0.8% vs a gain of around 0.45% just before the data came out.

The May nonfarm payroll headline jobs number was 139k vs the Reuters Poll calling for 130k. The prior headline jobs read for April was revised down to 147k from 177k.

The May unemployment rate was 4.2% vs a 4.2% estimate and the prior read of 4.2%.

Wage data, on a month-over-month- and year-over-year- basis was hotter-than-expected:

According to the CME's FedWatch Tool, the probability that the Fed sits on its hands and leaves its current target rate of 4.25%-4.50% unchanged at its June 17-18 FOMC meeting is now about 100% vs around 98% vs just before the data was released.

Looking further out into 2025, the market is now showing a bias for the next Fed rate cuts to occur in September and December vs September and October just before the data was released. Interest rate probabilities are now calling for a total of around 47 bps of cuts through year-end vs 54.2 bps just before the data came out.

The U.S. 10-Year Treasury yield US10YT=RR is now around 4.46%. It was around 4.41% just before the numbers came out. The yield ended Thursday at 4.395%.

All S&P 500 index .SPX sector SPDR ETFs are quoted higher in premarket trade with consumer discretionary XLY.P, up more than 1%, posting the biggest gain.

The SPDR S&P regional banking ETF KRE.P is up more than 1%.

Regarding the jobs data, Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin, said:

"The rise in payrolls was better than expected, but the previous months were revised significantly lower, taking some sheen off this report. The diffusion index for manufacturing was abysmally low, showing that payroll gains are concentrated while losses are widespread."

Jacobsen added "On its face, this shows an economy that’s holding up under the weight of a trade war, but the details show plenty of cracks forming."

Here is a premarket snapshot from around 08:50 a.m. EDT:

(Terence Gabriel, Chuck Mikolajczak)

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