5 things to know before the stock market opens on Friday, May 6
Here are the most important news, trends and analysis that investors need to start their trading day:
1. Futures fall after the worst day for the Dow and Nasdaq since 2020.
A trader works on the trading floor of the New York Stock Exchange (NYSE) in New York, May 5, 2022.
Andrew Kelly | Reuters
US stock futures turned positive and then negative again on Friday after the government’s strong April jobs report. The 10-year Treasury yield rose higher on Friday than it did on Thursday, when it topped 3.1%, the highest since November 2018. A rise in bond yields on Thursday sent the stock market down, which wiped out a strong rally in Federal Reserve aid the day before, and then some others.
- The Dow Jones industrial index lost 1063 points, or 3.1%, on fears that the Fed’s tightening cycle to slow the economy will not be able to bring inflation under control. The Nasdaq Tech Index fell nearly 5% to its lowest close since November 2020, pushing the bear market even further. Both of these drops broke three-day winning streaks and were the worst one-day drops since 2020.
- The S&P 500 fell nearly 3.6% for its second worst day of the year. S&P 500 and Dow were in correction.
2. Job Growth Accelerated in April: Non-Farm Jobs Better Than Expected
“We are hiring!” sign displayed at Starbucks
Mario Tama | News Getty Images | Getty Images
The Labor Department on Friday morning reported a better-than-expected forecast. In April, the US economy added 428,000 non-agricultural jobs. The unemployment rate remained stable at 3.6% last month. A slight decline was expected. The median hourly wage in April rose slightly less than expected by 0.3% month-on-month and was in line with estimates of a 5.5% year-on-year increase.
- The report shows that jobs are still scarce, even though inflation remains high. Thursday’s sell-off in the stock market was helped by a government report for the first quarter showing the sharpest decline in labor productivity in 75 years and a sharp rise in labor costs.
3. Oil jumps as EU considers sanctions against Russian oil; bitcoin is sinking
Drilling rigs are not in use at the company’s Permian Basin site on March 13, 2022 in Odessa, Texas. US President Joe Biden has imposed a production ban on Russian oil, the world’s third-largest oil producer, which could mean oil producers in the Permian Basin will have to produce more oil to meet demand.
Joe Radle | News Getty Images | Getty Images
U.S. oil prices rose about 1.5% on Friday, near $110 a barrel, ignoring concerns about global economic growth as proposed European Union sanctions on Russian oil raised the possibility of supply cuts. West Texas Intermediate oil, the US benchmark and the global Brent oil benchmark posted their second weekly gains in a row.
Bitcoin is a volatile asset and has been known to fluctuate more than 10% up or down in a single day.
Jakub Pozhitsky | Nurfoto | Getty Images
Bitcoin fell below $36,000 on Friday, a day after Wall Street’s sharp fall. The world’s largest cryptocurrency, touted by supporters as a hedge against inflation, continued to correlate with the Nasdaq, falling or rising along with tech stocks. Bitcoin is down nearly 50% from its all-time high of over $68,000 in November, with risky assets falling in 2022 due to rising inflation, Russia’s war in Ukraine, and the Fed’s tightening policy.
4. The FDA is restricting the use of the J&J Covid vaccine due to the risk of blood clotting.
Licensed professional nurse Eloise Flores prepares a dose of the Johnson & Johnson Janssen Covid-19 vaccine at a vaccination clinic in Los Angeles, California on December 15, 2021.
Frederick J. Brown | AFP | Getty Images
Food and Drug Administration decided to limit the use of the Johnson & Johnson Covid vaccine for adults due to the risk of a rare blood clotting syndrome. The J&J vaccine is one of three vaccines approved for use in the United States. The FDA said on Thursday that the J&J vaccine can be given in cases where Pfizer or Moderna Covid vaccines are not available or if a person does not want other shots. The U.S. health agency said its analysis of the risk of clotting problems after receiving the J&J vaccine requires a permit restriction.
5. Under Armor sinks after issuing weak guidance, unexpected loss
The interior of an Under Armor store on November 3, 2021 in Houston, Texas.
Brandon Bell | Getty Images
Shares of Under Armor fell more than 15% in premarket trading on Friday, shortly after the sneaker and apparel maker released disappointing guidance for fiscal 2023. In the March quarter just ended, Under Armor reported unexpected losses and sales that fell below Wall Street’s estimates. Problems with global supply chains and another round of Covid lockdowns in China have had an impact on demand. A number of international corporations, including Apple and Estee Lauder, have warned in recent days that resistance to Chinese Covid controls will hit their businesses.
— CNBC Hanna Miao, Jessie Pound, Tanaya Machil, Vicki McKeever, Jeff Cox, Patti Domm and Lauren Thomas and Reuters contributed to this report.
— Register Now for CNBC Investing Club to follow every move in Jim Cramer’s stock. Follow the wider market action like a pro on CNNBC Pro.