Dow futures tumble 370 points as Treasury yields spike on strong jobs report: Live updates

Stock futures tumbled after a much hotter-than-expected jobs report sent yields spiking as it likely means the Federal Reserve will halt its rate-cutting campaign.

S&P 500 futures shed 0.9% while Nasdaq-100 futures dropped nearly 1%. Futures tied to the Dow Jones Industrial Average dipped 318 points, or 0.7%.

Wall Street soured on the latest nonfarm payrolls reading, which showed job growth came out much stronger than anticipated. U.S. payrolls grew by 256,000 in December, while economists polled by Dow Jones expect to see an increase of 155,000. The unemployment rate, which was projected to remain at 4.2%, fell to 4.1% during the month.

The yield on the 10-year Treasury note spiked to highest level since late 2023 after the report.

"Good news for the economy but not for the markets, at least for now," senior global market strategist Scott Wren said. "However, this unexpected gain relative to the consensus projection does not change our view that the labor market is likely to decelerate further in coming quarters."

Earlier this week, the Institute for Supply Management's services index showed an acceleration in growth in the U.S. services industry in December as well as a rise in prices, which intensified concerns about stickier inflation. Further, private sector companies added fewer jobs than expected last month, according to payroll service provider ADP.

The market does not expect a rate cut from the central bank at its next meeting later this month, with fed funds futures trading data pricing in only about a 7% chance of a quarter-point cut, according to the CME FedWatch tool.

All three of the major averages are on track for weekly losses, with the S&P 500 off 0.4% and the Nasdaq Composite down 0.7%. The 30-stock Dow is on pace for a 0.2% decline on the week. The New York Stock Exchange was closed on Thursday to take part in a national day of mourning for late former President Jimmy Carter.

U.S. jobs report comes in much hotter than expected

The U.S. economy added many more jobs than anticipated last month, raising concern over whether the Fed can lower rates as much as investors hope.

The Labor Department said U.S. payrolls grew by 256,000 jobs in December. Economists polled by Dow Jones expected an addition of 155,000 jobs.

The unemployment rate also fell to 4.1%.

— Fred Imbert

See the stocks moving before the bell

These are some of the stocks moving before the bell on Friday:

• Delta Air Lines — The carrier's shares popped 6% after posting strong earnings and solid guidance in the fourth quarter.
• Walgreens Boots Alliance — The pharmacy stock surged 11% on better-than-expected earnings results in the fiscal first quarter.
• Wayfair -- Shares popped 5% after the retailer said it was leaving the German market and cutting around 3% of its global workforce.

See the full list here.

— Alex Harring

Citi downgrades Hims & Hers on overvalued GLP-1 revenue stream

Citi sees shares of Hims & Hers slipping in the future as the GLP-1 revenue stream grows more constrained.

The bank downgraded shares of the telehealth company to a sell rating from neutral. However, the firm lifted its target price to $25 from $24, implying an approximate 3% decline from the stock's Thursday closing price of $25.73.

Shares of Hims & Hers have added 6% in 2025 following a stunning 172% surge last year.

Citi analyst Daniel Grosslight wrote that the market is overvaluing the company's GLP-1 revenue stream, especially as semaglutide is likely to follow tirzepatide's removal off the FDA's shortage list.

"If this were to happen, HIMS weight loss market would be significantly constrained as they would only be able to compound GLP-1s by changing the formulation for the specific clinical benefit of an individual," the analyst said. "As such, our GLP-1 revenue falls from $400M in FY25 to $135M."

Grosslight added that the company still has a smart personalization strategy, which is enough to offset some of these headwinds.

— Lisa Kailai Han

Morgan Stanley upgrades Gilead Sciences to overweight, sees 27% potential upside

A key catalyst for Gilead Sciences comes as the company makes progress with its next-generation HIV treatment strategy, according to Morgan Stanley.

The bank upgraded the pharmaceuticals stock to an overweight rating from equal weight. Analyst Terence Flynn accompanied the move by hiking his $87 price target to $113.

Shares of Gilead Sciences are trading nearly 4% lower on the year after rising 14% in 2024. Flynn's updated price forecast is approximately 27% higher than where shares closed on Thursday.

"We acknowledge the stock is trading off the lows following positive pipeline developments for Lenacapavir in HIV prevention and anito-cel in multiple myeloma, but we see the potential for upward estimate revisions and further multiple expansion," Flynn wrote.

The analyst added that risks for Gilead Sciences could be posed by any potential policy changes to the Medicaid budge that might impact HIV therapies.

— Lisa Kailai Han

Delta earnings beat estimates, shares rise

Delta Air Lines shares were up more than 2% in the premarket after the airline reported better-than-expected fourth-quarter results.

The company earned $1.85 per share, excluding items, on $14.44 billion in revenue. Analysts polled by LSEG expected a profit of $1.75 per share on revenue of $14.18 billion.

— Fred Imbert

What to expect in Friday’s jobs report

All eyes are on the nonfarm payrolls report for December, due on Friday morning.

The data has taken on a new sense of importance as the Federal Reserve's path on this year's rate cuts has grown uncertain. Fed funds futures trading suggests a high likelihood that central bank policymakers will stand pat on rates at their meeting later this month.

Economists polled by Dow Jones expect that payrolls grew by 155,000 last month, cooler when compared to November's gain of 227,000. They see the unemployment rate holding steady at 4.2%.

Economists also forecast average hourly wages to have grown by 0.3% on a monthly basis and to have risen 4% from 12 months earlier.

Read more from CNBC's Jeff Cox on what's expected in the new report.

—Darla Mercado

Stock futures open in the red

U.S. stock futures fell on Thursday night.

S&P 500 futures and Nasdaq 100 futures each dropped 0.3%, while futures tied to the Dow Jones Industrial Average shed 0.2%.

— Sean Conlon