S&P 500 Can’t Find Relief Even as February Jobs Report Proves Stable

Also, 10-year T-Note, gold, crude oil, Japanese yen futures 

1. S&P 500 E-mini futures (/ES): -0.34% 
2. 10-year T-note futures (/ZN): +0.3% 
3. Gold futures (/GC): +0.21% 
4. Crude oil futures (/CL): +1.43% 
5. Japanese yen futures (/6J): +0.28% 
   

The February U.S. nonfarm payrolls report proved to be a relief for traders, but still not good enough to calm fears of a coming slowdown. The headline figure produced a gain of 151,000 jobs added last month, missing the 160,000 consensus forecast. The net two-month revision was down just 2,000.  

The internals of the report suggest that jobs growth is holding steady at the start of 2025, if not beginning to taper off. The U3 unemployment rose slightly to 4.1% from 4%. There may not be a silver lining. The household employment survey, from which the U3 unemployment rate is derived, showed workers lost 385,000 jobs. Coupled with the labor force expanding by 546,000, there weren’t enough jobs available to absorb slack in the labor market.  

Similarly, the loosening of the labor market can be seen in wages as well: Average hourly earnings came in at at a gain of 0.3% month over month (m/m) and up 4% year over year (y/y), falling just below the consensus estimates of gains of 0.3% m/m and 4.1% y/y. 

Overall, while February jobs growth beat the “whisper number” of adding 125,000, as provided by Bloomberg, the reality is the report was on the weaker side. Not weak enough to provoke the Federal Reserve into considering rate cuts before June, but weak enough for traders to think the labor market is losing steam. The initial relief rally in U.S. equity markets has since faded. 

S&P 500 futures (/ESH5) trimmed lower Friday after the jobs report crossed the wires. The weekly loss was tracking down at 3.58% as of Friday morning, putting it on track for the worst weekly performance since September 2024, and prices are down nearly 7% from the February swing high.  

Walgreens Boots Alliance (WBA) is set to go private in a $10 billion deal, ending a 100-year run as a public company. Broadcom (AVGO) rose 8% in pre-market trading after the chipmaker announced a better-than-expected earnings report. That lifted sentiment across the industry, with Nvidia (NVDA) rising over 1% ahead of the bell. Hewlett Packard (HPE) fell over 16% after the company provided a weak profit outlook.  

The jobs report came in below estimates but it wasn’t nearly as bad as some traders expected. Bond traders bought Treasuries, pushing yields lower along the curve, with 10-year T-note futures (/ZNM5) rising 0.44% in early trading. The jobs number gives the Fed a bit more room to maneuver, but tariffs remain a big question mark. Fed Gov. Christopher Waller said he does not see tariffs having a big impact on prices in the economy.  

Gold prices continued to trade in a tight range, and gains from earlier in the week are holding, putting the metal on track to be up more than 2%. If bulls can gain some more momentum, then the February swing highs may come into focus. Further weakening of the dollar will likely remain a tailwind for gold prices but traders remain cautious about the affect of tariffs. For now, there is little certainty around U.S. policy objectives, which leaves the metal in a precarious position.  

Crude oil prices (/CLJ5) rose about 1.5% this morning after the Russian deputy prime minister suggested OPEC+ could reverse its decision to allow more supply onto the market in April. The news comes after Brent oil prices traded below $70 per barrel. A change in the oil cartel’s decision isn’t unusual, given they carefully monitor and base recommendations on market conditions, and those conditions have sent a signal the market can’t absorb extra barrels over the short term. Meanwhile, the impact of the U.S. trade policies and the uncertainty around them is likely also a factor that OPEC leaders are consideration.  

Japanese yen futures (/6JH5) rose 0.3% this morning, continuing gains from earlier in the week as the outlook for U.S. yields remain to the downside. The U.S. yield premium vs. its Japanese counterparts deteriorated on Friday, with the U.S. 10-year yield of about 2.725% over its Japanese counterpart, which marks the weakest level since August 2022. The yen is now challenging highs from early December after prices gained over 2% this week.  

Christopher Vecchio, CFA, tastylive’s head of futures and forex, has been trading for nearly 20 years. He has consulted with multinational firms on FX hedging and lectured at Duke Law School on FX derivatives. Vecchio searches for high-convexity opportunities at the crossroads of macroeconomics and global politics. He hosts Futures Power Hour Monday-Friday and Let Me Explain on Tuesdays, and co-hosts Overtime, Monday-Thursday. @cvecchiofx
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. #@fxwestwater
For live daily programming, market news and commentary, visit tastylive or the YouTube channels tastylive (for options traders), and #tastyliveTrending for stocks, futures, forex & macro. 

Trade with a better broker, open a tastytrade account today. tastylive Inc. and tastytrade Inc. are separate but affiliated companies.