US stocks rose sharply on Friday after a weaker-than-expected September jobs report increased expectations that the Federal Reserve will leave interest rates unchanged at its October meeting.
The Dow Jones Industrial Average rose 324 points, while the S&P 500 gained 0.79%. The Nasdaq Composite advanced 1.21%.
The Labor Department’s employment report showed that the US economy added just 29,000 jobs in September, down from a downwardly revised increase of 133,000 in August.
Economists polled by Reuters had expected payrolls to rise by 90,000.
Unemployment also increased to 4.2%, compared with expectations for it to remain at 4.1%.
The report added to a series of recent economic indicators that have influenced expectations for the Fed’s next policy move.
Treasury yields fall as October hike bets weaken
Treasury yields declined following the jobs data, with the 10-year yield falling more than four basis points to 5.20%.
The two-year Treasury yield, which is closely linked to expectations for the Federal Reserve’s interest-rate policy, also declined for a second consecutive session.
Markets were pricing in a 16% probability of a 25-basis-point rate hike in October, down from 26% before the employment report.
CME FedWatch data indicated an 86% likelihood that the central bank would leave rates unchanged this month, compared with roughly 76% a day earlier.
Expectations for an October hike had already weakened after recent data showed a slower-than-expected increase in inflation and comments from Federal Reserve policymakers suggested that the central bank could wait before raising rates again.
The decline in Treasury yields also followed a rebound in the bond market on Thursday.
The recovery came after a selloff earlier in the week pushed the benchmark 10-year yield to multi-decade highs.
Despite Friday’s gains, the S&P 500 was on track for a weekly decline of about 1%, while the Dow was heading for a 1.7% weekly loss.
Chip stocks lead gains as oil prices fall
Technology and semiconductor stocks led gains. Nvidia shares rose 2.15%, while Broadcom and Advanced Micro Devices gained about 1.56% and 3%, respectively. Amazon and Tesla each advanced more than 1.8% and 3.8% respectively.
The broader market also received support from lower oil prices.
Brent crude fell below $100 a barrel after reports that European countries discussed releasing additional diesel and crude stockpiles.
Oil prices had previously risen amid concerns over fuel supplies and tensions surrounding the Middle East conflict.
Lower oil prices could ease some of the inflation pressure that has complicated the Federal Reserve’s policy outlook.
Other stocks moved sharply in trading.
Nike shares fell 6.3% after the company forecast a significant annual revenue decline, citing weakness in China, while also announcing job cuts and changes to its global business structure.
Fair Isaac dropped 5.8% following a report that the US Federal Housing Finance Agency plans to ease mortgage credit data requirements for Fannie Mae and Freddie Mac.
Bitcoin rose 4%, while Coinbase and Strategy gained about 5% each, reflecting the broader improvement in risk sentiment.
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