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Nonfarm Payrolls increase 272k in May versus 185k forecast

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GameStop ( GME ) slides on likely stock offering, quarterly sales

drop

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Nvidia ( NVDA ) falls; market cap back below $3 trillion

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Lyft ( LYFT ) gains after forecasting annual growth in bookings

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Futures down: Dow 0.56%, S&P 0.61%, Nasdaq 0.56%

(Updated at 8:46 a.m. ET/1246 GMT)

By Lisa Pauline Mattackal and Johann M Cherian

June 7 (Reuters) -

U.S. stock index futures dropped on Friday after a much

stronger-than-expected employment report signaled that the labor

market remains robust, dimming hopes of a September start to

policy easing by the Federal Reserve.

The Labor Department's report showed

Nonfarm Payrolls

rose by 272,000 jobs in May, against expectations of an

increase of 185,000. Average hourly earnings rose 0.4% on a

monthly basis, compared to an expectation of 0.3% growth.

Interest rate traders slashed bets on a September rate

reduction, now seeing a roughly 56% chance, versus 68% before

the data, according to the CME's FedWatch tool

"It's the type of report that's not going to cause the

Fed to want to change the course that it has been on, which is

to describe the need for higher interest rates and the potential

for strong job creation to keep upward pressure on inflation,"

said Brian Nick, senior investment strategist at The Macro

Institute.

However, the unemployment rate rose to 4% versus an

expected 3.9%. Nonfarm Payroll numbers for April and March were

also revised lower.

"The fact that you have these two figures, saying such

different things, makes it very hard for investors and even

harder for central bankers to know exactly what's going on,"

Nick said.

Rate-sensitive megacap technology stocks fell in

premarket trading, on track to extend losses from Thursday's

session, with shares of Apple ( AAPL ), Microsoft ( MSFT ) and

Meta Platforms ( META ) down between

0.3

% and

0

.

5

%.

Markets have struggled to anticipate the Fed's moves

this year, as persistently strong economic data quickly

dissipated expectations for rate reductions to begin as early as

March.

Friday's numbers pointed to underlying strength in the

U.S. labor market, offsetting a string of data over the past two

weeks that indicated potential weakness and caused investors to

increase bets on a September rate cut.

Fresh inflation data is due next week, just before the Fed

ends its two-day policy meeting on June 12. The central bank is

expected to hold rates steady.

Among individual names, GameStop ( GME ) dropped 21.6% after

announcing a potential stock offering and a drop in quarterly

sales. The retailer's shares after stock influencer "Roaring

Kitty" looked set to mark his return to YouTube.

Other so-called meme stocks r, with AMC Entertainment ( AMC )

and Koss Corp ( KOSS ) down 10.5% and 16.7%,

respectively. Retail-focused trading platform Robinhood

gained 2.7%.

At 8:46 a.m. ET, Dow e-minis were down 217 points,

or 0.56%, S&P 500 e-minis were down 32.75 points, or

0.61%, and Nasdaq 100 e-minis were down 106.5 points, or

0.56%.

Meanwhile, AI darling Nvidia ( NVDA ) slipped

2.2

%, on track to extend the previous session's losses with its

valuation dipping below the $3 trillion mark, behind that of

Apple ( AAPL ), again making it the world's third most-valuable

company.

The chipmaker's highly anticipated 10-for-1 share split

is due after markets close, which could make the

more-than-$1,000 stock cheaper for investors.

Lyft ( LYFT ) shares rose 2.3% following a forecast of 15%

annual growth in its gross bookings through 2027 after markets

closed on Thursday.