U.S. stock index futures traded in positive territory ahead of Friday’s opening, indicating markets may rebound after weakness in the previous session as investors responded to stronger-than-anticipated labour market data.
Futures gained momentum after the release of the latest employment report from the U.S. Labor Department, which showed hiring activity accelerated significantly during April.
The report revealed that non-farm payrolls increased by 115,000 jobs last month following an upward revision to March’s figure, which now stands at 185,000 new positions.
Analysts had forecast job growth of 63,000, compared with the initially reported increase of 178,000 in March.
Hiring gains were concentrated in healthcare, retail, transportation and warehousing, while employment within the federal government continued to decline modestly.
Meanwhile, the unemployment rate remained unchanged at 4.3 per cent in April, matching market expectations and the level recorded in March.
The stronger employment figures may ease concerns surrounding the economic effects of rising geopolitical tensions in the Middle East, despite renewed military confrontation overnight between the United States and Iran in the Strait of Hormuz.
Reports indicated that three U.S. destroyers were targeted by Iranian missiles and drones while passing through the strategic waterway. U.S. Central Command said the threats were intercepted and retaliatory strikes were launched against Iranian military facilities linked to the attacks.
Speaking later by phone with ABC News journalist Rachel Scott, President Donald Trump described the response against Iranian targets as “just a love tap” and said the ceasefire agreement remains active.
Wall Street ended Thursday’s trading session lower after a muted start evolved into broader selling pressure later in the day, although losses were not severe.
The Dow Jones Industrial Average fell 313.62 points, or 0.6 per cent, to 49,596.97. The S&P 500 declined 28.01 points, or 0.4 per cent, to finish at 7,337.11, while the Nasdaq Composite slipped 32.75 points, or 0.1 per cent, closing at 25,806.20.
Earlier in the session, investor sentiment had been supported by hopes that diplomatic discussions between Washington and Tehran could still prevent a wider regional conflict, although traders appeared cautious about making larger commitments without firmer evidence of progress.
President Donald Trump said on Wednesday that the United States and Iran had held “good talks over the last 24 hours” and voiced confidence that an agreement could be achieved within days.
Axios also reported that U.S. officials expect Iran to respond within the next 24 to 48 hours to a proposed memorandum intended to bring the conflict to an end.
However, sentiment weakened later in the session as oil prices reversed sharply higher. U.S. crude futures rose more than 1 per cent in electronic trading after previously dropping as much as 5.5 per cent.
Oil prices rebounded following a CNN report stating that Iran is attempting to require all commercial vessels travelling through the Strait of Hormuz to comply with a newly introduced transit procedure.
CNN reported that Iran’s recently established Persian Gulf Strait Authority has issued forms that all ships must complete before crossing the waterway in order to secure safe passage.
Markets interpreted the move as an effort by Tehran to formalise oversight of the strategic shipping corridor, renewing fears of further escalation in the region.
Additional economic data released Thursday showed initial claims for unemployment benefits increased less than expected in the week ending May 2.
According to the Labor Department, first-time unemployment claims rose by 10,000 to 200,000 from the previous week’s revised total of 190,000.
Economists had expected claims to reach 205,000 compared with the originally reported 189,000 in the prior week.
Sector performance was mixed during Thursday’s trading. Technology hardware stocks were among the weakest performers, with the NYSE Arca Computer Hardware Index falling 2.9 per cent after closing at a record high the previous day.
Semiconductor shares also came under pressure, with the Philadelphia Semiconductor Index dropping 2.7 per cent.
Energy stocks declined despite the recovery in crude oil prices, while software and airline shares posted some of the session’s strongest gains.
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