US close: Stocks rise as jobs slowdown eases rate hike fears

(Sharecast News) - US stocks registered solid gains on Friday after a sharp slowdown in the labour market eased concerns about a near-term interest rate hike, while oil prices fell after the G7 said it would release fuel reserves.

The Dow and S&P 500 rose 0.5% and 0.7%, respectively, while the Nasdaq surged 1.2%, led by strong gains from AI and chip stocks.

Data from the Bureau of Labor Statistics revealed that non-farm payrolls rose by just 29,000 in September while the unemployment rate ticked up to 4.2%. Payrolls had been expected to increase by 84,000 last month, while the unemployment rate was forecast to be unchanged from 4.1% in August. Meanwhile, average hourly earnings rose just 0.1% after a 0.3% gain in August.

There was also a 29,000 downward revision for August's job numbers, while July's data was revised down to show that 10,000 jobs were lost, versus a 21,000 gain previously reported.

The data raised hopes that the Federal Reserve will keep rates on hold at its meeting `this month after tightening policy last month.

"The slowdown in job creation, combined with almost no increase in wages, suggests employment is becoming less of an inflationary threat and reduces the likelihood of further Fed rate hikes this year," said Axel Rudolph, chief technical analyst at IG.

"While the weakness raises concerns about the health of the US economy, investors are focusing on the prospect that interest rates may not rise much further, giving equities a fresh boost."

While bonds firmed initially following the data, yields then rebounded slightly after a sharp drop the previous session, heading back towards the multi-decade highs reached earlier in the week. The 10-year Treasury yield was up 4.1bp at 5.283%.

Meanwhile, the Group of Seven agreed to release 100m barrels of oil and diesel over the next four months to mitigate supply pressures, sending December Brent crude prices down 1.1% to $101.23 a barrel, while WTI crude dropped 2.3% to $90.70.

In equity moves, AI and chip names such as heavyweights Nvidia, AMD and Broadcom performed well.

Even Tesla was firmly higher despite the news that third-quarter EV sales fell 2% on the back of a US market slowdown, though its energy business saw 9.6% growth over last year.

Chip group Micron Technology was bucking the trend as the stock pulled back slightly after rising the previous session following a bumper set of results.

Nike dropped sharply after guiding to a sharper-than-expected decline in annual revenues after the close on Thursday. The sportswear giant attributed the gloomier outlook to difficulties in the Chinese market, as it also announced a wave of job cuts to start next year.