NEW YORK (MarketWatch) — Friday’s job report has cast a pall over coming trade, and helped push U.S. stock-index futures down sharply on Monday’s Labor Day holiday, which also saw Europe’s troubles back in play.

U.S. equity markets were closed, but U.S. stock-index futures declined sharply in light holiday volume, following declines in equities around the globe, with the euro softening and the dollar and gold gaining on worries about Europe’s debt trouble.

“Europe’s faltering management of its crisis is starting to blur the line between a banking crisis and a euro crisis, resulting in a new vote of no confidence from the markets,” Lena Komileva, a strategist at Brown Brothers Harriman, wrote Monday in an emailed research note.

In weekend elections, German Chancellor Angela Merkel’s party was defeated in her home state, intensifying worry that opposition is building to aid for debt-riddled European countries. In Italy, a general strike was planned as Prime Minister Silvio Berlusconi requests parliamentary support for an austerity proposal.

And, European stocks were particularly hit with Germany’s Deutsche Bank AG DB, +1.57% (DBK) among those named in a U.S. mortgage-related lawsuit claiming major U.S. and European institutions misrepresented the quality of mortgages sold during the housing bubble. See detailed report.

Futures for the Dow Jones Industrial Average DJ1U fell 203 points to 11,005. Those for the Standard & Poor’s 500 Index SPX, +0.82% declined 23.70 points to 1,145.60. Nasdaq 100 futures ND1U shed 38.50 points to 2,126.25.

Gold futures GC1Z climbed 1.3% to $1,902.00 an ounce, while oil CL1V fell 2.5% to $87.27 a barrel in New York.

On Friday, the jobs report pulled all three stock markets into the red. The Dow Jones Industrial Average DJIA, +1.19% closed at 11,240.26, down 253.31 points, or 2.2%. The Nasdaq NDAQ, +1.09% closed at 2,480.33, down 65.71 points, or 2.2%. The S&P 500 SPX, +0.82% finished at 1,173.97, down 30.45 points or 2.5%.

“On the whole, the jobs report was negative and the recovery continues to be relatively anemic,” said Bill Stone, chief investment strategist at PNC Wealth Management. “In the short term, expect volatility — that’s probably the best one can say.”

On Tuesday, the Institute for Supply Management releases its index of activity for the U.S. services sector, which was expected to show a slowdown, but not outright contraction, in the rate of growth for nonmanufacturing firms.

That’s followed Thursday by weekly jobless claims for the period ending Sept. 3

A positive report on U.S. services could help counter some of the negativity in the job market. The past week’s better-than-expected manufacturing index only gave a small lift to stocks before they sank back into the red on the same morning it was announced.

“I think we’ll continue to see a little bit of softness in the services index, but it will likely echo what we saw on the manufacturing side and will probably be in expansion territory,” said Brad Sorensen, director of sector research at Charles Schwab.

Market indexes have had a tough quarter as political bickering over raising the U.S. debt ceiling helped bring on the nation’s first credit downgrade and reduced confidence in Washington’s ability to get much of anything accomplished.

On Friday, the government reported the unemployment rate held steady in August at 9.1% with nonfarm payrolls unchanged, lower than the 53,000 gain expected by economists surveyed by MarketWatch, and the weakest performance in nonfarm payroll since a decline in September 2010. Read more about the August jobs report.

Strategists say they are keeping an eye on employment reports above all else as an harbinger of improving economic growth over the long term. If jobs improve it’s because businesses are more confident about the economy and are expanding operations. That should lead to people spending more money, which causes businesses to hire more employees.

Business confidence is at its lowest point in more than two years, according to Grant Thornton LLP, a consultancy that surveys executives for their economic outlook.

“For the third quarter, GDP [gross domestic product] growth seems to be right around flat, though we expect it to be on the positive side,” said Charles Schwab’s Sorensen. “But in the fourth quarter, we see 3% growth, though that could certainly change with business confidence.”