US Stocks Rise on Weak Jobs Data and Reduced Rate Hike Expectations

The US stock market saw a positive close on Friday after weak jobs data reduced expectations for a Federal Reserve rate hike in October. The Dow Jones Industrial Average rose by 260 points, or 0.51%, with the S&P 500 gaining 0.76% and the Nasdaq Composite advancing 1.19%. This came as a surprise to investors, who had anticipated a stronger jobs report.

The September jobs data showed that the US economy added only 29,000 jobs, falling short of the expected 84,000 increase. The unemployment rate rose to 4.2% from 4.1%, and payroll figures for the previous two months were revised lower. This led traders to reduce their expectations for an October rate hike.

The probability of the Fed leaving interest rates unchanged at its October meeting rose to 77% from around 76% a day earlier, while expectations for at least a 25-basis-point rate hike fell to 22.7%. Treasury yields initially declined following the jobs report but later recovered, limiting the gains in equities.

Technology stocks were among the strongest performers, with Nvidia shares reaching an all-time high for the first time since May. Megacap stocks like Nvidia and Tesla provided significant support to the S&P 500, while rate-sensitive stocks also advanced.