US Job Losses Trim Rate Hike Expectations, Boost US Stocks

Wall Street's main indexes are on track for strong weekly gains after data showed the US economy unexpectedly shed jobs last month. The Labor Department report released on Friday revealed nonfarm payrolls fell 23,000 in July, far below the 80,000 job additions that economists polled by Reuters had expected.

This news has tempered speculation of the Federal Reserve raising borrowing costs in September, with some analysts suggesting there may be less urgency for a hike. According to Brian Therien, senior analyst at Edward Jones, 'For the Fed, the report could keep policymakers on track to hike rates; however, there may be somewhat less urgency, in our view, with the timing likely dependent on incoming inflation and employment data over the months ahead.'

The report has also led traders to pare back expectations for an increase in borrowing costs in September, with odds now at about 20 percent, down from 55 percent before the release. As a result, the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite are all headed for their best weekly showing since April.

Robust earnings from several sectors have propelled US stocks higher lately, with eight of the 11 S&P sectors trading higher on Friday. The consumer discretionary sector led gains, while energy lagged behind. Key gainers included Elon Musk's SpaceX, which surged 10.6 percent after the expiry of a share lockup restriction, and chip company Microchip Tech, which advanced 13.8 percent after forecasting quarterly revenue above estimates.