Live Markets-S&P 500 futures strengthen, yields slide after jobs data

A majority of S&P 500 .SPX sector SPDR ETFs are higher in premarket trading. Tech XLK.P, up more than 1.5%, is the strongest group. Energy XLE.P, off about 0.7%, is the weakest group. The State Street Regional Banking ETF KRE.P is up around 0.4%. The Invesco PHLX Semiconductor ETF SOXQ.O is rallying more than 3%. U.S. equity index futures have added to gains after the release of the latest labor market data. E-mini S&P 500 futures ESc1 are now up around 0.5% vs. a gain of around 0.25% just before the numbers came out. The July headline jobs number came in at -23,000 vs. an 80,000 estimate. The June reading was revised down to 20,000 from 57,000. The July unemployment rate was 4.1% vs. a 4.2% estimate, and a 4.2% prior print. Average hourly earnings on a month-over-month and year-over-year basis were both below the Reuters Poll. According to the CME's [FedWatch Tool](https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html), the probability that the Fed increases its current target rate of 3.50% to 3.75% by 25 basis points at its September 15 to 16 FOMC meeting has fallen to around 40% vs. 55% just before the data was released. The chance that the FOMC sits on its hands and leaves rates unchanged is now around 60% vs. 45%. Interest rate probabilities based on Fed funds futures are now suggesting the implied target rate will be about 28 bps higher through December 2026 vs. about 33 bps higher just before the data came out. The U.S. 10-Year Treasury Yield US10YT=RR is now around 4.61%. It was about 4.67% just before the data came out. The yield ended Thursday at 4.67%. U.S. equity index futures green; Nasdaq 100 up >1% Euro STOXX 600 index up ~0.7% Dollar falls; U.S. crude declines; bitcoin up >1%; gold up >2% U.S. 10-year Treasury yield falls to ~4.62% Regarding the jobs data, Gary Schlossberg, global strategist at Wells Fargo Investment Institute in San Francisco, told Reuters: > "What we're seeing is a softening but it's against the backdrop of an economy that's holding up well. It looks like businesses are doing more in the way of output with fewer workers." Schlossberg added, "Payrolls were down and the previous months were revised lower. That accentuates the fact that job growth is slowing a bit. The fact that average hourly earnings growth slowed and the year-over-year increase is below inflation means that inflation-adjusted incomes declined in July. That creates an added headwind for consumer spending, particularly lower and middle income families that are relying more on incomes to drive spending." "It's disappointing. We expected a stronger number consistent with the strength we're seeing in other activity data, like the purchasing manager reports, the weekly economic data, and the like. The tone of this report is noticeably weaker." Here is a premarket snapshot from around 8:51 a.m. EDT.

Live Markets-S&P 500 futures strengthen, yields slide after jobs data

Sector moves in premarket trading

Futures and yields move after jobs data

Market reaction and strategist comments

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