A weak jobs report, a strong day for stocks
US stocks climbed on Friday after the September jobs report came in far below forecasts. The numbers pushed investors to bet that the Federal Reserve will not raise interest rates at its meeting this month.
Employers added just 29,000 jobs in September, the Bureau of Labor Statistics said. Economists polled by LSEG had expected 90,000. The unemployment rate rose to 4.2% from 4.1%.
Revisions made the picture softer. July's payrolls were cut to a loss of 10,000 jobs, and August's gain was reduced to 133,000.
Stocks and bonds react
The S&P 500 rose 0.7% to close at 7,722.72. The Nasdaq Composite gained 1.2% to 27,190.86, a fresh high. The Dow Jones Industrial Average added 0.5% to 51,176.96.
The VIX, a measure of expected market swings, fell 6.6% to 15.31. Treasury yields pulled back from a 24-year peak, which helped rate-sensitive shares. Home builder KB Home was among the day's movers.
Semiconductor stocks stayed strong. Micron Technology's results earlier in the week lifted chip shares, and Nvidia hit a record.
The risks that remain
The Fed raised rates in September for the first time in three years, citing higher prices. Energy costs have climbed during the war with Iran, and oil is trading near $100 a barrel. That has kept inflation pressure in place.
Mortgage rates jumped to 7.28%, the highest in three years. A five-week selloff in global bonds has also pushed long-term borrowing costs up.
Strategists say a weak labor market and high energy prices put the Fed in a hard spot. A soft jobs report argues against another rate rise, but inflation makes a cut unlikely. Investors will watch third-quarter earnings and oil prices for the next signal.