Stock futures held onto gains on Friday morning even after the U.S. jobs report in May missed forecasts.
S&P 500 futures were up 0.08%, Dow Jones Industrial Average futures gained 0.17%, and Nasdaq futures rose 0.2%. Wall Street stepped into June with confidence on Thursday with each of the three benchmark indexes scoring new all-time highs. The S&P 500 and Nasdaq notched new intraday and closing records, while the Dow ended at its highest level ever.
The nonfarm payrolls report for May showed 135,000 jobs having been added to the U.S. economy, according to the Labor Department. Economists had expected 178,000 jobs in May. Both April and March figures were reduced: April's was cut to 174,000 from 211,000, while March was revised to 50,000 from 79,000.
The unemployment rate fell by 10 basis points to 4.3%, according to FactSet estimates, surprising analysts expecting the figure to hold steady. The unemployment rate fell to its lowest level since 2001. Average hourly wages increased 0.2% to $26.22, in-line with estimates.
"Today's jobs number is disappointing, but the overall trend is still very positive and the unemployment rate continues to decline," said Tony Bedikian, head of global markets at Citizens Bank. "The U.S. economy is showing other signs of strength as well and the market is still forecasting that the Fed will raise rates later this month."
Friday's jobs report could color investors' expectations for the pace of interest rate hikes for the rest of the year. The Federal Open Market Committee, the decision-making arm of the Federal Reserve, is next set to meet June 13-14. Wall Street has priced in a nearly 89% chance of a 25-basis-point increase to the federal funds rate when the FOMC meets, according to CME Group fed funds futures.