5 things to know before the stock market opens Friday

Here are the most important news items that investors need to start their trading day:

Stock futures fell Friday morning after a much stronger-than-expected July nonfarm payrolls report, signaling to investors the Federal Reserve is likely to stay in rate-hiking mode. The move in futures was relatively muted prior to the release of the labor market data. On Thursday, Wall Street posted a mixed session. The Dow Jones Industrial Average fell 0.26%, its third negative day in four, while the S&P 500 lost merely 0.08% and remains positive week to date. The tech-heavy Nasdaq Composite, meanwhile, rose 0.41% to close at its highest level since May 4.

The U.S. added 528,000 jobs in July, the Bureau of Labor Statistics said Friday, far exceeding the Dow Jones estimate of 258,000 and countering other recent data that suggested the economic recovery is slowing down. The unemployment rate fell to 3.5%, when economists had expected it to remain steady at 3.6%. Wages rose 0.5% on a month-over-month basis, topping estimates for a 0.3% gain. The sector with the most job gains in July was leisure and hospitality, with payrolls growing by 96,000.

China said Friday it’s putting a stop to cooperation with the U.S. on issues including climate change and military relations after House Speaker Nancy Pelosi earlier this week visited Taiwan, the democratic island that Beijing claims as its own territory. China also imposed sanctions on Pelosi personally for the visit, which further stoked tensions between the world’s two largest economies. U.S. Secretary of State Antony Blinken criticized China for launching missiles during military exercises near Taiwan this week, saying those actions represented an “extreme, disproportionate and escalatory” response, according to Reuters.

DoorDash shares jumped more than 9% in premarket trading Friday, after the food delivery company’s second-quarter revenue exceeded expectations and orders delivered in the period reached an all-time high of 426 million. However, DoorDash reported a wider-than-expected loss of 72 cents per share and warned it anticipates a “softer consumer spending environment” in the third and fourth quarters.

In more earnings news:

• Expedia Group posted strong earnings and revenue for the quarter ended June 30, sending shares up more than 4%, and CEO Peter Kern said “travel demand has remained strong” despite flight disruptions and economic uncertainty.
• Ride-hailing company Lyft reported better-than-expected adjusted earnings, based on estimates compiled by FactSet, helping send shares higher by 7.5% in premarket trading.
• Beyond Meat trimmed its full-year sales forecast and announced plans to lay off about 4% of its workforce, while also reporting disappointing Q2 results. CNBC’s Amelia Lucas has a full recap here.

Democrats in the Senate appear to have enough support to advance the so-called Inflation Reduction Act, and a 1% tax on stock buybacks is reportedly now part of the sweeping legislative proposal, CNBC’s Ylan Mui reported Friday morning. However, as a condition of garnering the backing of Sen. Kyrsten Sinema, D-Ariz., the bill no longer includes a change to the carried interest tax, which allows hedge fund and private equity investors to pay a lower rate. Read a full story on Sinema’s support for the legislation here.

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