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Dow futures gain more than 350 points after the jobs report shows less-than-expected wage growth

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, November 10, 2022.

Brendan McDermid | Reuters

U.S. stock futures rose on Friday as the December jobs report showed employment was only slightly stronger and wage growth was less than expected, showing some signs of progress amid the Federal Reserve̵[ads1]7;s rate hikes to curb inflation.

Dow Jones Industrial Average futures rose 370 points, or 1.12%. S&P 500 futures rose 1.10%, while Nasdaq 100 futures rose 1.13%.

The December nonfarm payrolls report showed the U.S. economy added 223,000 jobs last month, slightly higher than the 200,000 jobs economists polled by Dow Jones expected. In addition, wages grew more slowly than expected, rising 0.3% from the month when economists expected 0.4%.

“I don’t think it really changes the Fed’s view of the world that much,” said Michael Schumacher, head of macro strategy at Wells Fargo. “It’s positive for the Fed because it doesn’t seem like earnings are parabolic anymore. But I don’t think that changes the discussion at the upcoming meeting.

The Dow on Thursday fell more than 300 points Thursday following the release of a stronger-than-expected ADP private payrolls report. This raised concerns about higher Federal Reserve interest rates, which in turn raised fears that the US could soon fall into a recession.

“I allow in my thinking that we could have a recession by the end of the year, and that the recession will be caused by Fed tightening, QT, quantitative easing, a stronger dollar or oil prices,” Omega Family Office’s Leon Cooperman said on CNBC’s “Closing Bell: Overtime” on Thursday.

“And if we have a recession, the market will have finished the decline, say, down 35% from the peak, so that gives you the low 3000s,” Cooperman added.

Stocks are headed for losses in the first trading week of 2023. As of Thursday’s close, the Dow is down 0.66% for the week to date, heading for its fourth down week in five. Meanwhile, both the S&P 500 and Nasdaq are on course for their fifth straight week of losses, down 0.82% and 1.54%, respectively.

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