US stocks: US stocks rise as surprise payrolls decline cools rate-hike fears

US stock indexes advanced on Friday after data showed the economy unexpectedly lost jobs in July, reducing expectations of a Federal Reserve interest-rate hike in September, Reuters reported.

The Dow Jones Industrial Average rose 55.37 points, or 0.10%, to 53,940.47. The S&P 500 gained 18.87 points, or 0.25%, to 7,728.83, while the Nasdaq Composite added 181.72 points, or 0.69%, to 26,530.07.

Nonfarm payrolls fell by 23,000 last month, sharply missing the 80,000 increase forecast by economists polled by Reuters, Labour Department data showed.


“Even with a negative job print, the job market remains healthy. But it gives the Fed some room to pause in September,” Anthony Saglimbene, chief market strategist at Ameriprise Financial, was quoted by Reuters as saying.

“It has seemed like the Fed is pressing more on the inflation front, but today’s numbers may reframe that conversation and put the labour side of the mandate in focus,” he said.

Money-market traders sharply reduced bets on a September interest-rate hike following the report, with the probability falling to about 20% from 55%, according to LSEG data.

With new Fed Chair Kevin Warsh providing limited guidance on the policy outlook, investors have placed greater emphasis on economic data and comments from policymakers. Still, payrolls tend to be weaker in July, and economists broadly describe the labor market as being in a “slow-hire, slow-fire” phase.

Five of the S&P 500’s 11 sectors advanced, led by consumer discretionary stocks, while energy posted the steepest decline.

Atlassian surged 34.5%, and Microchip Technology climbed 11.4% after both companies issued quarterly revenue forecasts above Wall Street expectations.

Their upbeat outlooks supported the broader technology sector, lifting the Philadelphia Semiconductor Index by 2.3% and the S&P 500 software and services index by 1.3%. Cloudflare rallied 12% after raising its full-year revenue forecast above analysts’ estimates.

Wall Street’s major indexes were also set to post strong weekly gains. The S&P 500 and Dow were on course for their best week since April, while the Nasdaq was headed for its strongest performance since May.

A string of upbeat results from AI-linked companies has propelled the Dow and S&P 500 to record highs and helped the Nasdaq rebound from a sell-off that briefly took it close to correction territory.

Earnings have also been stronger than usual. More than 85% of the over 400 S&P 500 companies that have reported this quarter have surpassed analysts’ estimates, well above the typical beat rate of 68% recorded since 1994, according to LSEG data.

Among other movers, Airbnb shares surged 13.5% after the vacation-rental platform reported better-than-expected second-quarter revenue. Trade Desk plunged 24.8% after issuing a third-quarter revenue forecast below Wall Street estimates.

Market breadth was positive, with advancing stocks outnumbering decliners by 1.95 to 1 on the NYSE and 1.98 to 1 on the Nasdaq.

The S&P 500 registered three new 52-week highs and one new low, while the Nasdaq Composite recorded 71 new highs and 38 new lows.