US stocks ended higher on Friday after weaker-than-expected September jobs data reduced expectations for a Federal Reserve rate hike later this month.
The Dow Jones Industrial Average rose 260 points, or 0.51%, while the S&P 500 gained 0.76% and the Nasdaq Composite advanced 1.19%.
The Nasdaq briefly reached an all-time high during the session before retreating from its peak as Treasury yields rebounded.
Despite Friday’s gains, the Dow and S&P 500 posted weekly declines, while the Nasdaq extended its recent run of gains.
Weak jobs data lifts stocks
The US economy added 29,000 jobs in September, well below the 84,000 increase expected in the Dow Jones consensus and the 90,000 estimate in a Reuters poll.
The unemployment rate rose to 4.2% from 4.1%.
Payroll figures for the previous two months were also revised lower, adding to evidence of weaker labour-market conditions.
The data prompted traders to reduce expectations for an October rate increase.
According to CME FedWatch data cited in the reports, the probability of the Fed leaving interest rates unchanged at its October meeting rose to 77% from around 76% a day earlier.
Reuters data showed that expectations for at least a 25-basis-point rate hike fell to 22.7%, from 24.4% in the previous session and 64.2% a week earlier.
Treasury yields initially declined following the jobs report but later recovered, limiting the gains in equities.
Tech stocks lead market gains
Technology stocks were among the strongest performers as investors increased exposure to risk-sensitive assets.
Nvidia shares reached an all-time high for the first time since May.
CrowdStrike, Palo Alto Networks and AMD also reached record levels.
Megacap stocks including Nvidia and Tesla provided significant support to the S&P 500.
Tesla’s gains helped lift the consumer discretionary sector, which was the best-performing of the 11 major S&P sectors.
Rate-sensitive stocks also advanced. The S&P 500 real estate index gained about 1%, while the small-cap Russell 2000 rose around 1% for its biggest daily gain in a month.
Recent economic data showing resilient activity and slower-than-expected inflation, along with comments from Federal Reserve policymakers cautioning against another rate increase, had already reduced expectations for an October hike earlier in the week.
Weekly losses persist
Despite Friday’s advance, the Dow fell about 1.3% for the week, while the S&P 500 declined around 0.2%.
The Nasdaq gained roughly 0.5% over the week and recorded its third consecutive daily gain.
The Dow and S&P 500 both recorded their fourth weekly decline in the past five weeks, while the Nasdaq posted its fifth weekly gain in the last six weeks.
Outside the technology sector, Nike shares fell after the sportswear company forecast a sharp decline in annual revenue, citing weakness in China.
The company also announced job cuts and changes to its global business divisions.
Data storage stocks also declined. Western Digital and Seagate Technology were among the weakest performers in the S&P 500 technology index.
The declines followed a report that Toshiba plans to double production capacity for hard disk drives used in AI data centres within fiscal 2027.
Oil prices also pulled back after reports that European countries were considering releasing strategic fuel reserves, providing additional support to equities.