US stocks close higher as softer jobs data quiets rate-hike expectations

U.S. stocks rose on Friday, concluding a busy trading week, as weaker-than-anticipated jobs data reduced expectations for a rate hike from the Federal Reserve. The U.S. Bureau of Labor Statistics reported nonfarm payrolls rose by 29,000 jobs in the previous month, with the prior two months revised downward significantly, falling short of economists' projections.

Consequently, the probability of a 25 basis point rate increase by the Federal Reserve's October meeting was revised downward from 24.4% to 22.7%, according to CME FedWatch.

Robert Bernstone, head of trading at SummitTX Capital in New York, remarked that while the economy wasn't booming, it was sufficient to avoid a short-term rate hike. However, concerns persisted regarding the economy and inflation, leading to cautious optimism among investors. Despite the gains, both the Dow Jones Industrial Average and the S&P 500 experienced their fourth weekly decline in the past five weeks, while the Nasdaq Composite registered its fifth weekly gain in the last six weeks.

Small-cap stocks outpaced large-cap stocks, with the Russell 2000 index, which had its most significant daily increase of the month, gaining 0.9%. Mega-cap stocks, such as Nvidia and Tesla, also contributed significantly to the S&P 500's advance. Tesla's gains lifted the S&P 500 consumer discretionary index by 1.4%, making it the best-performing sector among the 11 major S&P sectors.

However, not all stocks performed well. Nike suffered a 3.6% decline as the worst-performing Dow component, following the company's announcement of a substantial revenue drop, job cuts, and a restructuring of its global business divisions. Additionally, data storage providers, Western Digital and Seagate Technology, plummeted around 10% as the worst performers in the S&P 500 tech index.

On the other hand, advancing issues outnumbered decliners by a ratio of 1.67-to-1 on the New York Stock Exchange (NYSE) and 1.34-to-1 on the Nasdaq Composite. The S&P 500 had 11 new 52-week highs and 20 new lows, while the Nasdaq Composite recorded 57 new highs and 224 new lows. Trading volume on U.S. exchanges reached 16.93 billion shares, exceeding the 17.28 billion average for the same period in the previous 20 trading days.