U.S. stock futures and European benchmarks climbed on Friday after a surprise July payrolls drop erased near-term bets on a Federal Reserve rate increase. The Stoxx Europe 600 headed for its best week since late June, helped further by a run of strong corporate earnings.
U.S. stock index futures extended gains and European stocks powered toward their best week since late June on Friday, after a surprise contraction in U.S. payrolls wiped out expectations of a near-term interest-rate hike.
Payrolls miss flips rate-hike bets
Nonfarm payrolls fell 23,000 in July, a Labor Department report showed. That was far below the 80,000 job additions economists polled by Reuters had expected. Unemployment eased to 4.1% in July from 4.2% in June. Average annual earnings rose 3.2% in July, below the 3.5% economists expected. The report dampened expectations of an interest-rate hike in September.
At 9:33 a.m. ET, S&P 500 E-minis rose 0.34%, Nasdaq 100 E-minis gained 0.76%, and Dow E-minis added 0.18%.
European benchmarks head for their best week since June
The Stoxx Europe 600 advanced 0.7%. That put it on course for a weekly gain of more than 1.5%. Germany's DAX jumped 1%, France's CAC 40 added 0.6%, and London's FTSE 100 gained 0.8%.
Money markets, which had priced in nearly an even chance of a 25-basis-point rate hike at the Fed's Sept. 16 meeting, shifted toward pricing in a longer pause. As a result, sovereign bond yields fell globally, giving equity desks a fresh liquidity tailwind.
Earnings add fuel to the rally
Kingspan Group surged 15.8% after raising its full-year profit outlook, citing demand for energy-efficient data-center insulation linked to the artificial intelligence boom. Genmab jumped nearly 10% after boosting its full-year revenue and profit guidance, lifting peers Novo Nordisk, Abivax, and Zealand Pharma between 3% and 5%. Genel Energy gained 12% after rejecting an unsolicited takeover approach it called undervalued.
Aggregate Stoxx 600 earnings are tracking 21% growth year over year. Traders shrugged off reports that Iranian lawmakers are weighing a bill to bar U.S. and Israeli vessels from the Strait of Hormuz, keeping equity desks in buy mode heading into the weekend.
Sources: Investing.com Economy News, Investing.com Stock Market News
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