Dow Jones, S&P 500, Nasdaq set to open down as monster jobs report rattles investors

6.30am: Focus returns to corporate earnings 

Wall Street is expected to open lower after stronger-than-expected non-farm payrolls data for January, released on Friday, rattled investors and prompted a rethink around the Federal Reserve’s next policy move.

Futures for the Dow Jones Industrial Average (DJIA) fell 0.7% in Monday pre-market trading, while those for the broader S&P 500 index dropped 0.9%, and contracts for the Nasdaq-100 shed 1.1%.

“Against expectations for 185,000 jobs to have been added, the figure of 517,000 caused initial consternation as it brought into question once more whether the aggressive hiking policy thus far has achieved its desired objective,” commented Richard Hunter, head of markets at interactive investor. 

The DJIA finished 0.4% lower at 33,926 points on Friday, while the S&P 500 was down 1% at 4,136 and the Nasdaq Composite lost 1.6% to 12,007.

“Losses were stemmed by an element of good news, with wage increases seemingly under control,” Hunter added. “The rise of 0.3%, at least for the moment, has eased inflationary concerns.”

Adding to the confusion is a decidedly mixed corporate reporting season, noted Hunter.

“Some of the big tech shares caught up with disappointing numbers which had previously been released after the bell, with Amazon and Alphabet, in particular, being subjects of selling pressure,” he said. “The fourth quarter season is now halfway through, with earnings having generally declined as expected, and with an increasingly cautious tone coming from boardrooms on the outlook.”

Disney is the biggest name reporting this week, although there will also be indicators from the consumer space, with updates from the likes of Under Armour, Ralph Lauren and Chipotle, while Royal Caribbean will give a taste of the current travel market, Hunter said.

Companies reporting quarterly earnings on Monday include Pinterest, Activision Blizzard, Loews Corporation and ZoomInfo Technologies.