US stocks climbed on Friday, with the Nasdaq Composite leading gains, after a surprisingly weak July jobs report fuelled expectations that the Federal Reserve may have less reason to raise interest rates in the near term.
At 9:43 a.m. EDT, the Nasdaq Composite was up 0.92% at 26,589.39, while the S&P 500 was up 0.37% at 7,738.61. The Dow Jones Industrial Average was higher 0.06% at 53,919.68 at 9:32 a.m. EDT.
The rally came after the US economy unexpectedly shed jobs in July, with nonfarm payrolls falling by 23,000, according to the latest employment report. Economists polled by Dow Jones had expected an increase of 83,000 jobs.
ALSO READ: US Sheds 23,000 Jobs In July; Stock Futures, Gold Surge On Easing Fed Hike Bets
The unemployment rate, meanwhile, edged down to 4.1% from 4.2%, while the labour-force participation rate fell to its lowest level in more than five years.
For investors, the weak jobs data reinforced expectations that the Fed may have less reason to raise interest rates. A majority of fed funds futures traders now expect the central bank to keep its benchmark rate at 3.50%-3.75% at its September meeting, according to the CME FedWatch tool. Just a day earlier, markets were pricing in a 55% probability of a 25-basis-point rate hike.
Wall Street is on track for a second consecutive week of gains. The S&P 500 is up more than 3% so far this week, while the Nasdaq is heading for its strongest weekly performance since April, with gains of more than 4%.
Chip stocks have been a key driver of the rebound. The iShares Semiconductor ETF (SOXX) has gained more than 7% this week, while the Dow is up nearly 3%.
Software stocks also boosted Friday's session. Cloud cybersecurity company Cloudflare surged 10% after providing a strong outlook for the full year and current quarter. Atlassian shares jumped 34% after the software company reported fourth-quarter adjusted earnings and revenue above expectations and issued upbeat guidance.
ALSO READ: Nasdaq, S&P 500 Futures Hit Session High: Chip Rebound Among Three Reasons Why Wall Street Is Upbeat
Airbnb shares climbed 12% after the vacation-rental company beat expectations on both revenue and earnings.
Oil prices edged lower as investors awaited a possible agreement between the US and Iran that could reopen the Strait of Hormuz. US Treasury Secretary Scott Bessent had said earlier this week that the two sides could reach a deal soon.
West Texas Intermediate crude futures for September delivery were down 0.3% at around $77 a barrel, while Brent crude, the international benchmark, slipped 0.6% to roughly $82 a barrel.
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