Futures subdued after jobs data raises odds of more rate hikes

US stock index futures were subdued on Monday on growing risks that the Federal Reserve will continue to hike interest rates after Friday's jobs data highlighted a still-strong labor market.

Nasdaq 100 futures were down slightly, with growth stocks including Apple Inc (AAPL.O), Amazon.com Inc (AMZN.O) and Microsoft Corp (MSFT.O) slipping in premarket trade.

US employers maintained a strong pace of hiring in March, data on Friday showed, pushing the unemployment rate down to 3.5% and raising odds of the Fed hiking rates one more time next month, reported Reuters.

While non-farm payrolls increased by 236,000 jobs last month, slightly weaker than economists' expectations, investors focused on the overall data which signaled labor market resilience.

"We see a disconnect between markets presuming much easier Fed policy on 'softer' data and how the Fed will actually see the data," Citi economists said.

"Not only should high inflation and a still-strong labor market keep cuts unlikely, but we see persistently too-strong inflation, including a 0.5% MoM increase in core CPI this week, as leading to further hikes." A string of reports last week, including weak private payrolls and job openings data, pointed to slowing labor demand and raised hopes of the Fed pausing its market-punishing rate hikes amid the recent banking sector turmoil.

Traders' bets of a 25-basis point rate hike by the Fed in May have risen to over 65%, according to CME Group's Fedwatch tool, up from 57% last week.

While US stock markets were closed for Good Friday, Treasury yields surged after the data, with the two-year yield , which typically moves in step with rate expectations, jumping to 3.99% on Friday. It was last down at 3.94%.

The focus this week will shift to U.S. consumer and producer prices data, minutes from the Fed's March meeting and quarterly results from big U.S. banks including JPMorgan Chase & Co (JPM.N), and Citigroup Inc (C.N).