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5 things to know before the stock market opens Friday

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1. Dow futures decline after strong jobs report

Traders on the floor of the NYSE, Feb. 3, 2022.
Source: NYSE

Dow futures fell 200 points and the 10-year Treasury yield rose to nearly 1.9% after Friday’s jobs report showed strong gains last month.

Nasdaq futures rose early Friday, boosted by Amazon‘s 11% premarket surge on strong cloud-led earnings after the bell Thursday. Snap rocketed more than 40% higher in the premarket, the morning after delivering better-than-expected quarterly results and rosy forward guidance.
The Nasdaq on Thursday sank 3.7%, slammed by Meta Platforms‘ over 26% plunge on weak earnings. The Facebook parent’s more than $230 billion market cap loss was the largest one-day value decline in Wall Street history.
The S&P 500 and the Dow Jones Industrial Average on Thursday slid 2.4% and 1.4%, respectively. Despite those losses, the Nasdaq and S&P 500 were still on track for their strongest weekly performance of 2022. The Dow was also tracking for a weekly gain as of Thursday’s close.

2. January nonfarm payrolls surge past expectations

A woman wearing a face mask walks past a “Now Hiring” sign in front of a store on January 13, 2021 in Arlington, Virginia.
Olivier Douliery | AFP | Getty Images

The U.S. economy created 467,000 jobs in January, the Labor Department reported Friday. That was much better than estimates for a 150,000 nonfarm payrolls gain. Expectations were all over the place coming into the print on worries the spike in Covid cases due to the raging omicron variant could jolt the data. In fact, many economists — such as those at PNC, Jefferies, Morgan Stanley and Goldman Sachs — had expected sharp declines in jobs last month. That clearly didn’t happen. The U.S. unemployment rate ticked up to 4% in January, slightly higher than estimates.

In addition to the jobs numbers, the Federal Reserve is monitoring signs of inflationary pressures such as U.S. oil prices extending gains above $90 per barrel to October 2014 highs. The Fed is expected to hike interest rates multiple times this year, starting in March, to combat rising inflation.

3. Amazon surges after strong cloud-led earnings, plans to hike Prime prices

PARIS, FRANCE – MAY 17: The Amazon Web Services (AWS) logo, a division of Amazon.com’s US e-commerce group is displayed during the 4th edition of the Viva Technology show at Parc des Expositions Porte de Versailles on May 17, 2019 in Paris, France. Viva Technology, the new international event brings together 9000 startups with top investors, companies to grow businesses and all players in the digital transformation who shape the future of the internet. (Photo by Chesnot/Getty Images)
Chesnot | Getty Images News | Getty Images

Amazon’s strong fourth quarter was carried entirely by its cloud business. In fact, North America and International e-commerce operations actually delivered losses. Amazon also reported a gain of almost $12 billion from its investment in electric vehicle marker Rivian Automotive. A Refinitiv analysis stripping out one-time items put adjusted earnings at $5.80 per share compared with estimates for $3.57. Revenue of $137.4 billion in Q4 slightly missed expectations. Amazon guided lower for first-quarter earnings and revenue.

The company also hiked the price of its Prime membership for the first time in four years. The annual cost will increase to $139 from $119. Monthly it’ll go to $14.99 from $12.99. The price changes will go into effect for new members on Feb. 18, and for current members after March 25.

4. Snap soars over 40% on much better-than-expected profit

The Snapchat application on a smartphone arranged in Saint Thomas, Virgin Islands, U.S., on Friday, Jan. 29, 2021.
Gabby Jones | Bloomberg | Getty Images

Snap‘s fourth-quarter adjusted earnings more than doubled estimates. Revenue and user growth also exceeded expectations. The Snapchat parent also issued an upbeat outlook. While saying it’s making progress adjusting to Apple’s new privacy policies that affect ad tracking, Snap has to contend with similar headwinds as Meta, which warned the Apple changes would result in a $10 billion revenue hit this year. On the post-earnings call, Snap’s CFO said, “It will take at least a couple more quarters for our advertising partners to build full confidence in our new measurement solutions.”

5. Ford sinks after earnings, revenue miss on supply chain issues

Ford Motor Co. signage at the Washington Auto Show in Washington, D.C., Jan. 21, 2022.
Al Drago | Bloomberg | Getty Images

Shares of Ford, which have soared roughly 78% in the past 12 months, were tracking for an over 5% drop at Friday’s open. The automaker’s adjusted fourth-quarter earnings were well below estimates, while revenue also missed expectations. Ford’s stake in Rivian pumped up full-year net income. While hitting its annual earnings guidance for 2021, Ford fell short of production target estimates due to supply chain problems, including an ongoing shortage of semiconductor chips, the company’s CFO said on the post-earnings call. The company released solid guidance for 2022.

— Reuters contributed to this report. Sign up now for the CNBC Investing Club to follow Jim Cramer’s every stock move. Follow the broader market action like a pro on CNBC Pro.

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