Market pros said a stronger-than-expected employment report released Friday lowers the chance of an interest rate cut by the Federal Reserve, which could send stocks lower on Monday following a long holiday weekend.
"Good news is bad news, it's a stronger number than some were hoping for because you don't want jobs to be picking up at this stage because inflation is becoming a problem," Marc Pado, chief market strategist at Cantor Fitzgerald, told CNBC.com. "The Fed's hands are truly tied at this point; this is telling you that there is no chance of a rate cut through the June meeting."
The Labor Department said payrolls grew by 180,000, well above the consensus economists' estimate of 135,000, while the unemployment rate moved to a five-month low of 4.4%.
"Part of this rally recently has been the market wanting to see a chance for easier money policies from the Fed," said Pado. "I think the market is going to react negatively and is set up for a pullback on Monday."
U.S. markets were closed on Friday in observance of Good Friday but stock futures traded initially higher after the robust jobs data was released, with the Dow futures up about 40 points and the S&P 500 futures rising five points.
"I think we'll be entering a trading environment that is going to be characterized by more volatility," Bill Strazzullo, chief market strategist at Bell Curve Trading, told CNBC. "I do think that the short-term momentum is probably still up and there is probably one more push to the upside."
Charles Rotblut, senior market analyst at Zacks.com, told CNBC.com the stock market could move lower on Monday although the start of quarterly earnings season makes it difficult to predict.
"I wouldn't be surprised to see weakness on Monday," said Rotblut. "I wouldn't expect a huge drop but the Dow could pull back 50 to 100 points because there is a lot of optimism for a rate cut priced in."
Last week the Nasdaq gained 2.2%, the Dow Jones Industrial Average rose 1.7% and the S&P 500 climbed 1.5%. The major markets hit a six-week high and have now almost fully recovered from the late-February stock selloff.
For the year, the Nasdaq is now up 2.3%, while the S&P is up 1.8% and the Dow up 0.8%.