Nasdaq 100, Dow Jones, S&P 500: Higher as Apple Earnings, Job Growth Exceed Expectations

Highlights

• US added 253K jobs in April, beating forecast
• Bank turmoil and decelerating economy did not affect job growth
• Apple shares up over 2% in pre-market trading

Overview

On Friday, the major US stock indexes were set to rebound following a most negative performance this week. The early strength is being fueled as regional bank shares rose. Meanwhile, Apple reported better-than-expected quarterly earnings, pushing its shares up over 2% in premarket trading.

At 12:45 GMT, futures tied to the Dow Jones Industrial Average were up 217 points, or 0.6%, while S&P 500 futures rose 0.8%, and Nasdaq-100 futures added 0.75%.

The US economy added 253,000 jobs in April, according to the Bureau of Labor Statistics. The figure beat Wall Street expectations of 180,000 new jobs. Despite this, stocks rose even as April’s jobs numbers came in higher than anticipated.

This week, shares of regional banking companies have been under pressure, with traders fearing other institutions may suffer the same fate as Silicon Valley Bank and Signature Bank, which both collapsed in March. The S&P 500 is down 2.6%, while the NASDAQ is off 2.1%, and the Dow is down 2.8% for the week.

US Economy Surpasses Job Growth Expectations in April

According to the Bureau of Labor Statistics, the US economy saw better-than-expected job growth in April. This, despite bank turmoil and a decelerating economy. Nonfarm payrolls increased by 253,000 for the month, surpassing Wall Street’s estimate of 180,000. Additionally, the unemployment rate was 3.4%, lower than the expected 3.6%, tying for the lowest level since 1969. Average hourly earnings, a key inflation indicator, rose by 0.5% for the month, exceeding the estimated 0.3%. On an annual basis, wages increased by 4.4%, higher than the anticipated 4.2% gain.

Selloff in Regional Banks Overblown?

Tom Lee, the head of research at Fundstrat, states that the market is excessively exaggerating the selloff in regional banks. And may be reaching a point of hysteria. Lee gave examples of Pacific West Bancorp and Republic First Bancorp. Both saw their share prices drop even after issuing notices to clarify their identities.

Lee also mentioned that some people believe that short-term speculators and 0DTE options are contributing to the pressure. Despite this, regional bank stocks rose broadly on Friday, with the SPDR S&P Regional Banking ETF (KRE) up by over 2% in premarket trading.

Apple Beats Estimates,

Several stocks are making headlines in pre-market trading, including Apple, whose shares rose by 2.7% after beating quarterly earnings and revenue estimates, thanks in part to the strong performance of its flagship iPhone. However, Apple did report its second consecutive quarter of declining revenue. This has only happened three times in the past decade.

DraftKings, a sports betting company, saw its stock surge by 11.6% after reporting higher-than-expected revenue for the latest quarter and increasing its full-year outlook.

DoorDash shares rose by 4% in premarket trading after the food delivery service reported a smaller-than-expected loss and beat analyst forecasts for quarterly revenue, prompting an increase in full-year guidance.

On the other hand, Lyft shares fell by 15.4% in off-hours trading due to a weaker-than-expected forecast for the current quarter.

Finally, Coinbase’s stock rallied by 8.1% after posting better-than-expected quarterly results, despite warning of upcoming pressure on its subscription and services revenue.