Key facts
- US stock futures rose as July nonfarm payrolls unexpectedly fell by 23,000.
- Economists had forecast 80,000 job additions for July.
- The unemployment rate decreased to 4.1% in July from 4.2% in June.
- Average hourly earnings increased 3.2% year-over-year in July, below the 3.5% forecast.
- The chance of a September Fed rate hike fell to 43.9% from 57% previously.
- Atlassian and Microchip Tech shares advanced on strong quarterly revenue forecasts.
U.S. stock index futures extended gains on Friday after data showed the U.S. economy unexpectedly shed jobs in July, dampening expectations of an interest-rate hike in September. The Labor Department reported that nonfarm payrolls fell by 23,000 in July, significantly below the 80,000 additions economists had forecast. The unemployment rate eased to 4.1% in July from 4.2% in June. Average hourly earnings rose 3.2% on an annual basis in July, compared with the 3.5% economists had expected.
Interest rate futures reflected the shift in expectations, with the market pricing in only a 43.9% chance of a Federal Reserve tightening in September, down from 57% before the jobs report. The probability of the Fed holding rates next month rose to 60.4% from 43.2% prior to the data release.
Collaboration software maker Atlassian jumped 34.5% in early trading, while chip company Microchip Tech advanced 11.4% after both forecast quarterly revenue above estimates. Earlier in the week, U.S. stock futures had edged higher as investors reacted to upbeat corporate earnings and turned their attention to the July nonfarm payrolls report.