US Stocks Rise Near Record High After Jobs Report Eases Inflation Worries

US stocks rose near their record high on Friday after a softer-than-expected jobs report eased concerns about inflation. The S&P 500 climbed 0.7% and pulled within 1% of its August record, while the Dow Jones Industrial Average added 250 points (0.5%) and the Nasdaq composite gained 1.2%. The government reported that employers across the country added 29,000 more jobs to their payrolls than they cut last month, which was fewer than economists expected.

This slower job growth has tempered worries about inflation, which remains a concern for financial markets. Inflation has remained above what's considered acceptable, and the Federal Reserve recently raised its main interest rate for the first time in three years to combat it. The Fed's decision was influenced by concerns that a strong economy could fuel even higher inflation.

Adam Schickling, senior economist at Vanguard, said this report 'strengthens the case for the Federal Reserve to remain patient.' He noted that the labor market hasn't deteriorated sharply but also hasn't meaningfully strengthened, giving policymakers reason to wait for additional data. The pullback in expectations for an October rate hike has calmed a rattled bond market.

The yield on the 10-year Treasury briefly dropped below 5.17%, down from its peak near 5.35% on Thursday. Easing yields can help the economy by making borrowing more affordable, while higher yields tend to undercut stock prices and other investments.