US Stocks Near Record High After Jobs Report Eases Inflation Fears
US stocks rose near their record high on Friday after a jobs report alleviated concerns about inflation. The S&P 500 gained 0.7%, pushing it within 1% of its August record, while the Dow Jones Industrial Average and Nasdaq composite also increased.
The labor market added only 29,000 jobs in September, lower than expected, which eased fears that a strong economy could fuel higher inflation. This development pushed traders to reduce their bets on an interest rate hike by the Federal Reserve at its next meeting later this month.
According to data from CME Group, the probability of a rate hike dropped to less than 23% from 64% just a week ago. The easing of expectations for a rate hike helped calm the bond market, with the 10-year Treasury yield briefly dropping below 5.17%. This decrease in yields can make borrowing more affordable and positively impact the economy.
Despite Americans' frustration with inflation and their finances, the US economy has been performing well. Earlier this week, it was announced that the economy's growth in the spring was better than initially thought, driven by businesses investing in AI data centers and consumer spending.