US Markets

Futures sharply lower on jobs data miss

US added 126K jobs in March

U.S. stock index futures plunged on Good Friday after the nonfarm payrolls came in far below expectations at 126,000.

"This jobs report might anticipate a sooner than later market correction," said Peter Cardillo, chief market economist at Rockwell Global Capital. "The perception of bad news is not going to be interpreted as good news."

The 10-year bond yield sank to 1.81 percent from 1.89 percent. The 2-year Treasury yield fell as low as 0.46 percent from 0.55 percent.

The United States added 126,000 jobs in March, the weakest since 2013 and below Reuters expectations of 245,000 payrolls. The unemployment rate held steady at 5.5 percent, as expected. Wages increased slightly more than expected at 0.3 percent.

The government's employment report will be studied by traders across the world for clues as to when the Federal Reserve might look to raise interest rates from record lows.

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The Dow futures were off more than 160 points on Friday morning, with other index futures also significantly lower.

Futures had held slightly positive ahead of the jobs report as Thursday's weekly claims number was encouragingly lower than expected. However, Wednesday's ADP private payrolls report also missed expectations.

"The Fed is left with a mediocre economy and with a labor market that is on the cusp of more substantive wage gains because the labor market is tight and productivity is punk. It's a very tough spot for them and they have no bullets to respond to further economic weakness IF it were to occur," Peter Boockvar, chief market analyst at The Lindsey Group said in a note.

He pointed out that the jobs number is still subject to three revisions and should not be taken as a final read.

However, he said Friday's "number brings the first quarter job growth to 197,000 on average vs 260,000 in 2014 in what was a very soft economic beginning to the year."

The U.S. dollar edged lower and the euro gained to $1.10 following the report.

"Traders have booked more profit in their dollar trade and we are experiencing more downward pressure for the dollar. So, basically what is taking place in the market is that investors are dialing back on the rate hike expectations," said Naeem Aslam, chief market analyst at AvaTrade, in a note Friday after the data release.

Beyond the jobs figures, the day will likely be quiet on the trading front, with just the futures and bond markets open in the U.S. on Good Friday. The futures market closed at 9:15 a.m. ET.

Read MoreExpect Monday weakness after Good Friday jobs

European stock markets were also closed, while Asian stocks advanced in choppy trade Friday ahead of the nonfarms.

CNBC's Patti Domm contributed to this report.