NEW YORK (AP) — U.S. stocks rose in an optimistic mood Friday after reports that U.S. employers ramped up hiring efforts last month.
The S&P 500 rose 0.7% in early trading, moving toward a record high set on Monday. As of 9:35 a.m. ET, the Dow Jones Industrial Average was up 266 points, or 0.6%, and the Nasdaq Composite was up 1.2%.
Stocks have regained losses from earlier in the week on concerns that the deteriorating situation in the Middle East could disrupt global oil flows. Oil prices rose again on Friday, but the move was much more subdued than earlier in the week as the world continued to watch how Israel would respond to Iran’s missile attack from Tuesday.
Meanwhile, the strong US economy has regained the top spot in driving the market.
Bond yields soared in the bond market after the U.S. government said employers added 254,000 more jobs than they cut last month. This accelerated from August’s pace of 159,000 jobs and was faster than economists expected.
Lindsey Rozner, head of multisector investments at Goldman Sachs Asset Management, said it was a “grand slam” of reporting. He said Fed policymakers “must be smiling” as they try to accomplish the difficult feat of keeping the economy humming while controlling inflation.
Friday’s report capped a week of mostly upbeat data on the job market, including the latest information showing layoffs remain relatively low and employers are still looking for workers. Such data raises one of Wall Street’s biggest questions: whether the job market will hold up after the Federal Reserve kept interest rates at 20-year highs. Helps soothe.
Before Friday’s jobs report, data showed that hiring by U.S. employers was generally slowing. This is not surprising, given that the Fed was trying to put enough brakes on the economy to stamp out high inflation.
The explosive numbers support expectations that the U.S. economy will indeed continue to grow, especially now that the Federal Reserve is cutting interest rates to further strengthen the economy. Last month, the Federal Reserve cut its key interest rate for the first time in four years and signaled further cuts to come through next year.
The jobs report was strong enough to cause traders to revise downward their expectations for how deep the Federal Reserve will cut interest rates at its next meeting in November. According to CME Group data, they currently project a mere 9% chance that the Fed will cut rates by another 0.5 percentage point, which is larger than usual. This is down from the coin flip odds they saw a week ago.
The yield on the two-year note rose to 3.86% from 3.71% late Thursday. The 10-year bond yield, which takes into account future economic growth and inflation more than the two-year bond yield, rose from 3.85% to 3.95%.
Also on Friday, about 45,000 longshoremen at East Coast and Gulf ports agreed to a three-day strike halt until Jan. 15, with their unions giving time to negotiate new contracts. He has now returned to work.
In the oil market, the price of international standard Brent crude rose 0.8% to $78.24 per barrel, up more than 9% for the week. The price of benchmark U.S. crude oil per barrel rose 0.5% to $74.09 from about $68 at the beginning of the week.
Overseas, stock market indexes rose across much of Europe following strong employment data in the world’s largest economy. In Asia, Hong Kong’s Hang Seng rose 2.8% in recent sharp gains. It soared more than 10% this week on excitement over a flurry of recent announcements by the Chinese government to prop up the world’s second-largest economy.
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AP Business writers Yuri Kageyama and Matt Ott contributed.
