(Reuters) – The S&P 500 was set for a higher open on Friday following a brutal selloff in the previous session as a drop in the unemployment rate offset a slide in technology stocks, while investors remained cautious about a patchy economic recovery.
Nonfarm payrolls increased by 1.37 million jobs last month after advancing 1.73 million in July, the Labor Department’s closely watched employment report showed. The unemployment rate fell to 8.4% from 10.2% in July, steeper than the 9.8% fall that economists polled by Reuters forecast.
Still, the data adds pressure on the White House and Congress to restart stalled negotiations over the next coronavirus relief package to lift the economy out of the worst recession since the Great Depression.
“The data is consistent with an improving labor market that is helping to support consumption, but remains a long ways away from pre-COVID-19 levels,” said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute.
After climbing to record highs on the back of historic stimulus and a narrow rally in heavyweight technology stocks, the S&P 500 and Nasdaq suffered their worst day in nearly three months on Thursday as investors booked gains.
Apple Inc (AAPL.O), Microsoft Inc (MSFT.O), Amazon.com Inc (AMZN.O), Tesla Inc (TSLA.O) and Nvidia Inc (NVDA.O), which bore the brunt of Thursday’s losses, extended declines to between 1% and 4% in premarket trading.
“Today you’re seeing participants trying to test whether yesterday’s sell-off is going to turn out to be something that has more to it or it was just a one-day selling pressure,” said Robert Pavlik, chief investment strategist at SlateStone Wealth LLC in New York.
Fund managers have warned Thursday’s declines may be a preview of a rocky two months ahead as institutional investors return from summer vacations and refocus on the potential economic pitfalls.
The run up to the Nov. 3 presidential election is also expected to add to volatility.
At 8:53 a.m. ET, Dow e-minis 1YMcv1 were up 176 points, or 0.62%. S&P 500 e-minis EScv1 were up 8.5 points, or 0.25% and Nasdaq 100 e-minis NQcv1 were down 76 points, or 0.64%.
Wall Street’s fear gauge eased from a 10-week high.
Shares of rate-sensitive bank stocks including Bank of America Corp (BAC.N), Citigroup Inc (C.N), JPMorgan Chase & Co (JPM.N) rose between 1.7% and 2% as the benchmark 10-year US10YT=RR yield bounced off of a near four-week low. [US/]
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