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US Stocks: Wall Street set to fall after Musk’s warning, strong jobs data

U.S. stocks were set to open lower on Friday as Tesla CEO Elon Musk’s warning on the economic outlook and a solid jobs report fanned worries over tighter monetary policy and soaring inflation.

The Labor Department’s closely watched report showed nonfarm payrolls rose by 390,000 jobs last month, while the unemployment rate held steady at 3.6%, signs of a tight labor market that could keep the Federal Reserve on its aggressive policy tightening path.

Economists polled by Reuters had forecast nonfarm payrolls to rise by 325,000 jobs, after a jump of 428,000 in April. The report also showed solid wage gains last month.

“There isn’t clear and convincing evidence that inflation is slowing or that the labor market is cooling. There may be some hints that job hiring is slowing,” said Brian Jacobsen, senior investment strategist with Allspring Global Investments.

Tesla Inc’s shares fell 5.2% in premarket trading after Musk said he has a “super bad feeling” about the economy and wants to cut about 10% of jobs at the electric-car maker, in an email to company executives seen by Reuters.

Apple Inc dropped nearly 3% after a bearish brokerage comment and a report that EU countries and lawmakers were set to agree on a common charging port for mobile phones, tablets and headphones on June 7, a proposal that has been fiercely criticized by Apple.

Volatility has gripped Wall Street in recent weeks due to hawkish comments from Fed officials, even as a recent set of economic data suggested that inflation may have peaked.

The blue-chip Dow has fallen 8.5% so far this year, the benchmark S&P 500 has lost 12.4%, and the tech-heavy Nasdaq has shed 21.3%, with rate-sensitive growth stocks bearing the brunt of the selloff.

“The selloff over the last few weeks could be a floor. It is going to be pretty choppy from an equity market perspective,” said Alan McKnight, chief investment officer at Regions Private Wealth.

“Historically, volumes in summer are lower globally, and unless we see a material change in Fed policy and the course of the economy in a deceleration mode, we don’t see a lot in the short run that is going to drive equity prices significantly higher.”
At 08:44 a.m. ET, Dow e-minis were down 214 points, or 0.64%, S&P 500 e-minis were down 39.75 points, or 0.95%, and Nasdaq 100 e-minis were down 195.75 points, or 1.52%.

Kohl’s Corp gained 4% after a media report that the department store received takeover bids from private equity firm Sycamore Partners and retail holding company Franchise Group Inc .

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