U.S. Stocks Rise on Weak Jobs Data

For investors, the key shift was not growth optimism but relief that labor-market strength may not add fresh inflation pressure at a moment when the Fed has already resumed raising rates. Traders cut the odds of an October rate hike to less than 21% from 64% a week earlier, according to CME Group data, a sign that softer payrolls are buying policymakers time to wait for more evidence.

The bond market reacted first. The 10-year Treasury yield briefly slipped below 5.17% before settling back around 5.25%, down from Thursday’s near-5.35% peak that had rattled equity valuations. Lower yields help support stock prices, especially for expensive growth names whose future earnings look more attractive when discount rates fall.

That dynamic put artificial intelligence leaders back in favor, with Nvidia rising 1.9% to provide the biggest lift to the S&P 500. Tesla jumped 5.5% after reporting quarterly deliveries of 486,532 vehicles, topping expectations and adding to the market’s appetite for companies still showing revenue momentum even as the macro backdrop cools.

The softer yields also helped offset weakness in other parts of the market. Nike fell 5.8% after revenue disappointed and its profit outlook missed expectations, underscoring how investors are rewarding companies with either clear growth catalysts or relief from falling rates, while punishing those with slower sales and cautious guidance.

Outside U.S. stocks, lower oil prices added to the calmer tone. Brent crude fell 1.9% to $100.41 a barrel, easing some of the pressure on bond markets and inflation expectations as traders watched war-related disruptions in global energy supplies.

The broader message for markets is that a still-growing but less overheating U.S. economy is the sweet spot for equities right now. If upcoming inflation data confirms that price pressures are not re-accelerating, investors may keep leaning toward rate-cut expectations and push the major indexes closer to fresh highs.