Stock Futures Tumble After Strong Jobs Report Sparks Rate Concerns

Stock futures tumbled on Friday after a stronger-than-expected jobs report raised concerns that the Federal Reserve may halt its rate-cutting campaign. The Dow Jones Industrial Average futures dropped 336 points, or nearly 0.8%, while S&P 500 and Nasdaq futures fell 1% and 1.2%, respectively.

The U.S. economy added 256,000 jobs in December, significantly higher than the 155,000 expected by economists polled by Dow Jones. The unemployment rate also dipped to 4.1%, down from 4.2% in November. The robust labor market data has led investors to reassess the likelihood of further rate cuts by the Federal Reserve.

Fed funds futures trading data indicates only a 7% chance of a quarter-point rate cut at the central bank’s next meeting later this month. Earlier this week, the Institute for Supply Management‘s services index showed growth in the U.S. services sector, alongside rising prices, intensifying concerns about persistent inflation.

Private sector employment also grew last month, according to payroll service provider ADP. All three major stock indexes are on track for weekly losses, with the S&P 500 down 0.4%, the Nasdaq off 0.7%, and the Dow Jones Industrial Average slipping 0.2%.

Delta Air Lines shares rose more than 2% in premarket trading after the company reported better-than-expected fourth-quarter results. The airline earned $1.85 per share on $14.44 billion in revenue, surpassing analysts’ estimates.

Meanwhile, Citi downgraded shares of telehealth company Hims & Hers to a sell rating, citing concerns over the company’s GLP-1 revenue stream. Shares of Gilead Sciences, however, received an upgrade from Morgan Stanley, which highlighted progress in the company’s next-generation HIV treatment strategy.

Investors are now closely watching the Federal Reserve’s next moves, as the strong jobs report and persistent inflation could delay further rate cuts. The yield on the 10-year Treasury note rose slightly to 4.70%, reflecting market uncertainty about the central bank’s policy direction.