5 things to know before the stock market opens on Friday

Here are the most important news that investors need to start their trading day:

1. Stock futures drop after jobs report

People walk past the New York Stock Exchange (NYSE) on Wall Street on July 12, 2022 in New York City.

Angela Weiss | AFP | Getty Images

Stock futures fell Friday morning after the much stronger-than-expected July non-farm payrolls report, signaling to investors that the Federal Reserve is likely to remain in interest rate hike mode. The movement in futures contracts was relatively muted prior to the release of labor market data. On Thursday, Wall Street recorded a mixed session. The Dow Jones Industrial Average fell 0.26%, its third negative day in four days, while the S&P 500 lost only 0.08% and is still a positive week so far. Meanwhile, the technology-focused Nasdaq Composite Index rose 0.41% to close at its highest level since May 4.

2. The US added 528,000 jobs in July

A man walks past an “We’re Hiring” sign in New York City on July 8, 2022.

Angela Weiss | AFP | Getty Images

The United States added 528,000 jobs in July, the Bureau of Labor Statistics said Friday, far exceeding the Dow Jones estimate of 258,000 jobs, and contrasting with other recent data indicating that the economic recovery is slowing. The unemployment rate fell to 3.5%, when economists had expected it to remain steady at 3.6%. Wages rose 0.5% month over month, topping estimates for a 0.3% rise. The sector with the biggest job gains in July was the leisure and hospitality sector, where salaries grew by 96K.

3. China stops cooperation with the United States in the military and climate fields

China said on Friday it had suspended cooperation with the United States on issues including climate change and military ties after House Speaker Nancy Pelosi earlier this week visited Taiwan, the democratic island that Beijing claims. China also sanctioned Pelosi personally for the visit, heightening tensions between the world’s two largest economies. US Secretary of State Anthony Blinken criticized China for firing missiles during military exercises near Taiwan this week, saying those measures represented an “extreme and disproportionate response and escalation,” according to Reuters.

4. Pops DoorDash and More Profits

An AFP journalist checks the food delivery app DoorDash on her smartphone on February 27, 2020 in Washington, DC.

Eric Bardat | AFP | Getty Images

DoorDash shares jumped more than 9% in pre-market trading Friday, after the food delivery company’s second-quarter revenue beat expectations and orders delivered in the period reached an all-time high of 426 million. However, DoorDash reported a wider-than-expected loss of 72 cents a share and warned that it expects a “softer consumer spending environment” in the third and fourth quarters.

In more earnings news:

  • Expedia Group reported strong earnings and revenue for the quarter ended June 30, sending shares up more than 4%, and CEO Peter Kern said “travel demand remained strong” despite flight disruptions and economic uncertainty.
  • Lyft Passenger Co. reported better-than-expected adjusted earnings, based on estimates compiled by FactSet, helping shares rise 7.5% in pre-market trading.
  • Beyond Meat trimmed its full-year sales forecast and announced plans to lay off about 4% of its workforce, while also reporting disappointing results for the second quarter. CNBC’s Amelia Lucas has a full summary here.

5. The Democrats are said to have added a buyback tax to the Inflation Reduction Act.

Senator Kirsten Senema, an Arizona Democrat, listens during a news conference at the Dirksen Senate Building in Washington, D.C., U.S., on Wednesday, July 28, 2021.

Stephanie Reynolds | Bloomberg | Getty Images

Senate Democrats seem to have enough support to push the so-called inflation-reduction bill, and a 1% tax on stock buybacks is now said to be part of the overall legislative proposal, CNBC’s Ylan Mui reported Friday morning. However, as a condition of getting the support of Senator Kirsten Senema, D-Arizona, the bill no longer includes a change to the carryover interest tax, which allows hedge funds and private equity investors to pay a lower rate. Read the full story about Sinema’s support for the legislation here.

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