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US stocks closed higher on Friday after an unexpectedly weak September nonfarm payrolls report strengthened expectations that the Federal Reserve will hold rates steady at its October policy meeting, according to Sina Finance. The Dow Jones Industrial Average rose 250 points, or 0.5%; the S&P 500 gained 0.7%; and the Nasdaq Composite climbed 1.2%. The Nasdaq hit an intraday record high before a rebound in Treasury yields pulled stocks off their session peaks. Despite Friday's rally, the Dow still fell about 1.3% for the week; the S&P 500 was roughly flat, down a slight 0.3%; and the Nasdaq rose 0.6% on the week, posting a third straight daily gain on Friday.
Treasury yields fell early after the jobs data but later rebounded, dragging stocks away from intraday highs. Risk appetite on Wall Street recovered as technology stocks strengthened broadly.
Nvidia hit its highest level since May but failed to hold a record closing high; CrowdStrike, Palo Alto Networks and AMD also touched record highs, with AMD closing up nearly 3%. The September payrolls report showed the US added just 29,000 jobs, with the unemployment rate rising to 4.2%. The Dow Jones survey had expected 84,000 new jobs and an unemployment rate holding at 4.1%.
Phil Blancato, chief market strategist at Osaic, said: "This is the exact kind of number the market wanted from a labor standpoint. Not too hot, not too cold ... not overly great, and not weakening." The data led traders to reassess the Fed's policy path. The CME FedWatch tool showed federal funds futures pricing a 77% probability that the Fed holds rates steady this month.
Saira Malik, chief investment officer at Nuveen, said earnings season is about to begin and the jobs data could provide support for the market, forecasting a "very strong" earnings season. "So, I think this could be the start of the Santa Claus rally that we’ve all been hoping for," she said.
Oil prices retreated, a positive for stocks, after reports that some EU countries are considering releasing strategic fuel reserves under pressure from the Trump administration. US stocks closed slightly higher on Thursday, the first trading day of October, but a global bond selloff had pressured the Dow and S&P 500 toward weekly losses, with the Nasdaq the only major index on track for a weekly gain.