Wall St set to open higher on surprise drop in unemployment rate

The S&P 500 and Dow Jones indexes were set to jump at the open on Friday after a closely watched report showed a surprise drop in the US unemployment rate, lending weight to hopes of a faster economic rebound from a coronavirus-driven slump.

The unemployment rate unexpectedly fell to 13.3pc in May from 14.7pc in April and layoffs abated, the Labor Department said on Friday.

Economists polled by Reuters had forecast the jobless rate jumping to 19.8pc.

Interest-rate sensitive stocks including Bank of America Corp, Citigroup Inc and JPMorgan Chase & Co jumped between 3.8pc and 8.8pc as US Treasury yields rose after the data.

"This is completely out of expectations," said Subadra Rajappa, head of US rates strategy in Societe Generale, New York.

"This is a tremendously positive step in the right direction, and probably points to a faster recovery, at least in the jobs market, than people had expected."

Wall Street has rebounded sharply from a coronavirus-driven crash in March as investors bet on a revival in business activity following the easing of a nationwide lockdown.

The Nasdaq Composite, S&P 500 and Dow Jones indexes are now down about 2pc, 8pc, and 11pc from their respective all-time highs.

At 8:56 a.m. ET, Dow e-minis were up 630 points, or 2.4pc, S&P 500 e-minis were up 47.25 points, or 1.52pc and Nasdaq 100 e-minis were up 4.75 points, or 0.05pc.

Boeing Co gained 8.0pc premarket on hopes of a pickup in air travel a day after American Airlines Group Inc and United Airlines said they would boost their US flight schedule next month.

American Airlines surged 27.3pc and United Airlines jumped 20.6pc.

Fears of more disruptions from social unrest have also eased in the past two days, with the largely peaceful protests against the killing of a black man in police custody waning into Friday morning and emergency curfews in many cities being lifted.

Vaccine maker Novavax Inc jumped 10pc after saying it would receive up to $60 million from the US Department of Defense to fund manufacturing of its COVID-19 vaccine candidate.

Apparel retailer Gap Inc gained 2.1pc even as it reported a quarterly loss of nearly $1 billion due to coronavirus-induced store closures.