A trader works on the floor of the New York Stock Exchange.
U.S. stock futures traded slightly higher early Tuesday morning after the Dow slipped from a record high on Friday before the three-day Labor Day weekend.
Dow Jones Industrial Average futures rose by 28 points. S&P 500 and Nasdaq 100 futures traded in mildly positive territory.
In regular trading Friday, the Dow lost 74.73 points, or 0.21%, while the S&P 500 fell slightly by 0.03%. The tech-heavy Nasdaq rose 0.21%, helping support the broader market.
The losses came after the August jobs report came in short of expectations, highlighting continued concern about the spread of Covid and its delta variant. Nonfarm payrolls increased by 235,000 in August, the Labor Department reported, but economists surveyed by Dow Jones expected 720,000 jobs.
Ryan Detrick, LPL Financial’s chief market strategist, said there could be a strong job rebound “in coming months” and that there are promising signs that the worst of the surge in Covid cases could be behind us. However, the August jobs report has the potential to delay the Fed’s tapering timeline, which is widely expected to begin this year, Detrick said.
“Fed Chair Powell has made it clear that the labor market will serve as his tell regarding when to begin tapering asset purchases,” he said. “With [Friday’s] big payroll miss, it is clear the labor market is under some near-term pressure, and while these pressures are likely to dissipate the Fed will probably err on the side of caution to avoid acting prematurely.”
One week into September, the major averages are all up, despite a muted kickoff to for the month. Year-to-date, the Dow is up 15.5%, the S&P is up 20.7% and the Nasdaq Composite is up 19.2%, although investors and analysts are still on the lookout for a major correction in September.
“Admittedly, passive investors have yet to feel pain,” Bank of America said in a note Friday, adding that “2021 represents yet another year during which the [S&P 500] has crushed it, but some signs indicate that it may be time to start getting ‘pickier’ when it comes to stocks.”
No economic data is due out Tuesday. Later in the week, Mary Daly, president of the Federal Reserve Bank of San Francisco, is speak at a conference hosted by the Brookings Institute.