Wall Street set to open higher as jobs data shows economic strength By Reuters

© Reuters. Traders work on Formal foreign exchange trading platformthe floor of the New York Stock Exchange (NYSE) in New York City, U.S., March 30, 2022. REUTERS/Brendan McDermid

By Amruta Khandekar and Bansari Mayur Kamdar

(Reuters) - Wall Street was set to open higher on Friday, as U.S. jobs grew lesser than expected in March but unemployment rate fell to a new two-year low, underscoring solid momentum in the economy.

Futures pared gains but stayed in the positive territory after the Labor Department's closely watched employment report showed nonfarm payrolls increased by 431,000 jobs last month. Economists polled by Reuters had forecast payrolls increasing 490,000.

The jobless rate dropped to 3.6%, the lowest since February 2020, while average hourly earnings increased 0.4% after edging up 0.1% in February.

"The data suggests that the labor market is still very strong. The underlying indication is that the economy remains very strong," Paul Nolte, portfolio manager, Kingsview Investment Management.

"The Fed should feel comfortable in raising interest rates at this point, at least initially, without fearing that they are going to dump the economy into a recession."

Traders now see a 72.8% chance of a 50-basis point interest rate hike by the Fed at its May policy meeting. The U.S. central bank last month increased it by 25 basis points for the first time since 2018 and policymakers have signaled readiness for aggressive interest rate hikes to combat decades-high inflation.

Rate-sensitive banks such as Bank of America (NYSE:BAC), Goldman Sachs (NYSE:GS), JPMorgan Chase & Co (NYSE:JPM), Citigroup (NYSE:C), Morgan Stanley (NYSE:MS) and Wells Fargo (NYSE:WFC) & Co rose between 0.7% and 1.3% in premarket trading.

The closely watched yield curve between two-year and 10-year notes reinverted after the jobs report.

At 08:59 a.m. ET, Dow e-minis were up 114 points, or 0.33%, S&P 500 e-minis were up 11.75 points, or 0.26%, and Nasdaq 100 e-minis were up 30.25 points, or 0.2%.

Megacap stocks including Tesla (NASDAQ:TSLA) Inc, Amazon.com (NASDAQ:AMZN), Microsoft Corp (NASDAQ:MSFT), Meta Platforms, and Google (NASDAQ:GOOGL) owner-Alphabet Inc gained between 0.4% and 0.3%.

Apple (NASDAQ:AAPL) edged lower after JP Morgan removed the stock from its analyst 'focus list'. [nFWN2VZ0SD]

GameStop Corp (NYSE:GME), which was at the center of a social-media fueled trading frenzy last year, jumped 15.2%, after the videogame retailer said it would seek shareholder approval for a stock split.

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