U.S. stock indexes rose on Friday after a much weaker than expected September jobs report cooled bets on a Federal Reserve interest rate hike this month. The S&P 500, Dow, and Nasdaq all gained, even as Treasury yields extended a weeks-long selloff.
The S&P 500 climbed as a soft jobs report cut the odds of a near-term Fed rate hike, while bond yields kept rising anyway.
Payrolls miss sends hike odds lower
Nonfarm payrolls increased by 29,000 jobs last month. That fell short of the economists polled by Reuters, who had forecast an expected gain of 90,000. August's job growth was also revised down, to 133,000 from a previously reported 162,000.
As a result, traders trimmed bets on an October rate hike, now seeing roughly a 21% chance the Federal Reserve raises rates by 25 basis points this month, down from about 26% before the report. The Fed last month raised rates for the first time since 2023.
S&P 500 leads a broad rally
The S&P 500 rose 56.27 points, or 0.7%, to 7,722.72. The Dow Jones Industrial Average gained 250.40 points, or 0.5%, to 51,176.96. The Nasdaq Composite jumped 319.27 points, or 1.2%, to 27,190.86, outperforming the other two gauges.
Bonds keep selling despite the miss
Yet Treasury yields rose anyway. The 10-year yield added 4.93 basis points to 5.283%. The 2-year yield climbed 4.6 basis points to 4.833%. Some investors noted the report was not weak enough to remove the chance the Fed raises rates in coming months.
According to Reuters: "It wasn't as hot a labor market print as August," said Joseph Purtell, senior vice president, portfolio manager and rates trader at Neuberger. He still described the labor market as largely stable.
Source: Investing.com
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