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

On Friday, US stocks experienced a rise as weaker-than-expected job data eased concerns about the Federal Reserve raising interest rates in October. The Labor Department reported a 29,000 increase in nonfarm payrolls for the previous month, significantly lower than the estimated 90,000. Initial expectations were for a 25 basis point hike at the end of October, but this was revised to 22.7%, according to CME FedWatch.

Robert Bernstone, head of trading at SummitTX Capital in New York, stated that while the economic environment is not overheating, there remains concerns about inflation and the overall economy, leading to cautious optimism. The Dow Jones Industrial Average added 0.49% to reach 51,176.96, the S&P 500 climbed 0.73% to 7,722.72, and the Nasdaq Composite gained 1.19% to 27,190.86.

Rate-sensitive stocks, such as the S&P 500 real estate index and the small-cap Russell 2000 index, also benefited from the softer job data, with gains of 0.4% and 0.9% respectively. Mega-cap stocks, including Nvidia and Tesla, led the advance, with Tesla's share price rising 4.7% and contributing to the S&P 500's consumer discretionary index's strongest performance among the 11 major sectors.

Despite Friday's gains, both the Dow and S&P 500 recorded their fourth weekly decline in the past five sessions, while the Nasdaq secured a weekly gain for the fifth time in the last six. For the week, the S&P 500 fell 0.27%, the Nasdaq rose 0.45%, and the Dow dropped 1.26%. Nike was the worst-performing Dow stock, falling 3.6% after announcing a significant revenue decline and job cuts.

Data storage providers, Western Digital and Seagate Technology, also saw substantial declines, with shares of Toshiba planning to double its production capacity for hard disk drives used in AI data centers within fiscal 2027.