Wall Street set for lower open after bumper payrolls data
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Nonfarm Payrolls increase 272k in May versus 185k forecast
GameStop slides on likely stock offering, quarterly sales drop
Nvidia falls; market cap back below $3 trillion
Lyft gains after forecasting annual growth in bookings
Futures down: Dow 0.56%, S&P 0.61%, Nasdaq 0.56%
Updated at 8:46 a.m. ET/1246 GMT
By Lisa Pauline Mattackal and Johann M Cherian
June 7 (Reuters) - U.S. stock index futures dropped on Friday after a much stronger-than-expected employment report signaled that the labor market remains robust, dimming hopes of a September start to policy easing by the Federal Reserve.
The Labor Department's report showed Nonfarm Payrolls rose by 272,000 jobs in May, against expectations of an increase of 185,000. Average hourly earnings rose 0.4% on a monthly basis, compared to an expectation of 0.3% growth.
Interest rate traders slashed bets on a September rate reduction, now seeing a roughly 56% chance, versus 68% before the data, according to the CME's FedWatch tool
"It's the type of report that's not going to cause the Fed to want to change the course that it has been on, which is to describe the need for higher interest rates and the potential for strong job creation to keep upward pressure on inflation," said Brian Nick, senior investment strategist at The Macro Institute.
However, the unemployment rate rose to 4% versus an expected 3.9%. Nonfarm Payroll numbers for April and March were also revised lower.
"The fact that you have these two figures, saying such different things, makes it very hard for investors and even harder for central bankers to know exactly what's going on," Nick said.
Rate-sensitive megacap technology stocks fell in premarket trading, on track to extend losses from Thursday's session, with shares of Apple AAPL.O, Microsoft MSFT.O and Meta Platforms META.O down between 0.3 % and 0 . 5 %.
Markets have struggled to anticipate the Fed's moves this year, as persistently strong economic data quickly dissipated expectations for rate reductions to begin as early as March.
Friday's numbers pointed to underlying strength in the U.S. labor market, offsetting a string of data over the past two weeks that indicated potential weakness and caused investors to increase bets on a September rate cut.
Fresh inflation data is due next week, just before the Fed ends its two-day policy meeting on June 12. The central bank is expected to hold rates steady.
Among individual names, GameStop GME.N dropped21.6% after announcing a potential stock offering and adrop in quarterly sales. The retailer'sshares had initially surgedafter stock influencer "Roaring Kitty" looked set to mark his return to YouTube.
Other so-called meme stocks reversed gains, with AMC Entertainment AMC.N and Koss Corp KOSS.O down10.5% and 16.7%, respectively. Retail-focused trading platform Robinhood HOOD.O gained 2.7%.
At8:46 a.m. ET, Dow e-minis 1YMcv1were down 217 points, or 0.56%, S&P 500 e-minis EScv1were down 32.75 points, or 0.61%, and Nasdaq 100 e-minis NQcv1were down 106.5 points, or 0.56%.
Meanwhile, AI darling Nvidia NVDA.O slipped 2.2 %, on track to extend the previous session's losses with its valuation dipping below the $3 trillion mark, behind that of Apple AAPL.O, again making it the world's third most-valuable company.
The chipmaker's highly anticipated 10-for-1 share split is due after markets close, which could make the more-than-$1,000 stock cheaper for investors.
Lyft LYFT.O shares rose 2.3% following a forecast of 15% annual growth in its gross bookings through 2027 after markets closed on Thursday.
The Fed's broad projection range The Fed's broad projection range https://reut.rs/3UMkU7m
Reporting by Lisa Mattackal and Johann M Cherian in Bengaluru, Editing by Pooja Desai
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