Major stock indexes rose on Friday after a softer-than-forecast US jobs report cut the odds of another Federal Reserve rate hike this month. The S&P 500 climbed 52.03 points, or 0.68%, to 7,718.26, while the dollar weakened and Treasury yields reversed early declines to finish higher.
Payrolls miss forecasts
Nonfarm payrolls increased by 29,000 jobs last month, well below the 90,000 economists polled by Reuters had expected. August's gain was revised down to 133,000.
The soft print pushed traders to pare back bets on near-term tightening. Markets now see a roughly 21% chance the Fed hikes rates by 25 basis points in October, down from about 26% before the report, according to LSEG. Expectations for a December rate hike also fell.
According to Reuters: "It wasn’t as hot a labor market print as August was", said Joseph Purtell, senior vice president, portfolio manager and rates trader at Neuberger. Still, he said the broader labor market remains stable and the report does not change that view.
Stocks climb, Nasdaq hits record
Besides the S&P 500's gain, the Dow Jones Industrial Average rose 168.55 points, or 0.34%, to 51,097.30. The Nasdaq Composite outpaced both, rising 306.18 points, or 1.14%, to 27,177.77 after hitting a record high earlier in the session. Lower oil prices added to the bullish mood in equities.
Globally, MSCI's gauge of stocks across the globe rose 5.58 points, or 0.49%, to 1,138.84, and the pan-European STOXX 600 index added 0.69%.
Dollar falls, yields reverse higher
The dollar weakened against both the euro and the yen after the data, with the euro up 0.12% at $1.1255 and the greenback down 0.2% to 157.76 against the yen.
Treasury yields initially fell on the jobs report but reversed to close higher, as some investors noted the Federal Reserve could still raise rates again over the next six to nine months. The yield on benchmark US 10-year notes rose 2.18 basis points to 5.256%, while the 2-year note yield, which tracks Fed rate expectations closely, added 3.35 basis points to 4.821%. Ten-year yields registered their largest quarterly rise since 1994.
Oil prices fell after reports of talks in Europe on additional diesel and crude stock releases eased concerns over tight supply. US crude dropped 2.15% to $90.83 a barrel, while Brent fell 0.92% to $101.37. Spot gold slipped 1.08% to $4,132.65 an ounce.
Source: Investing.com
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