Dow jumps as Apple looks to jumpstart jobs day party

The Dow Jones led US stocks higher on Friday, as upbeat earnings from Apple lifted spirits awaiting the monthly jobs report, a crucial test of interest rate expectations.

Dow Jones Industrial Average (^DJI) futures jumped 0.8%, or 320 points, while S&P 500 futures (^GSPC) rose 0.4%. Futures on the tech-heavy Nasdaq 100 (^NDX) rose nearly 0.7%.

All three metrics are poised to build on sharp closing gains as the market absorbs the earnings flow before shifting focus to the big event, April's employment numbers.

Apple's quarterly earnings beat expectations, surprising investors with better revenue from China than estimates in the face of reports of declining iPhone sales.

While CEO Tim Cook talked up Apple's plans to develop artificial intelligence — a major focus this earnings season — it was the company's plans for a $110 billion stock buyback, the largest in U.S. history, that captured the market's attention. Apple shares rose 6% in pre-market trading, and are set to support the Dow Jones Index.

The blue-chip index is also seeing support from heavyweight Amgen (AMGN), whose shares rose 14% as comments from its CEO suggested its obesity drug could take on market leaders Novo Nordisk (NVO).

The April jobs report, scheduled for release at 8:30 a.m. EDT, could change the mood, given that the labor market is seen as setting the course for inflation — the key factor shaping the Fed's interest rate policy. Nonfarm payrolls are expected to grow at a steady but slowing rate last month.

Read more: What the Fed's interest rate decision means for bank accounts, CDs, loans and credit cards

Investors have reset their bets on the timing and likelihood of a rate cut this year after Chairman Jerome Powell took a more dovish tone than expected at the end of the Federal Reserve's meeting on Wednesday.

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  • Evaluation discussion on Apple

    Let the Apple (AAPL) stock valuation debate begin after a weak quarter (I call it soft even when the sell side ignores all the sales declines and just focuses on amazing Apple stuff) and before some AI catalysts soon.

    Ananda Baruah of Loop Capital has a good point on this:

    “The stock isn't 'expensive' per se… but it's not cheap either. It's hard to tell if valuation is friend or foe right now, given that Apple is trading more in the middle of its recent trading range but with softer fundamentals. Our hunch is is that near-term stock dynamics could be variable, with stock dynamics in the second half of the year being more “contextual” given that there does not currently appear to be a great deal of divergence in estimates versus Wall Street, and that Aplle has the potential to generate news about… Gen AI and AR/VR (i.e. VisionPro), which are two areas that can be catalytic.”

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