US equity indexes climbed on Friday after the Bureau of Labor Statistics reported a sharp slowdown in job growth, reducing the likelihood of a second consecutive interest rate hike by the Federal Reserve. The Nasdaq Composite gained 1% to reach 27,150.5, while the S&P 500 rose 0.7% to 7,716.1. The Dow Jones Industrial Average added 0.4%, closing out the intraday session at 51,104.1. Most sectors finished in positive territory, with consumer discretionary leading the advance and only healthcare and consumer staples lagging.
The labor report showed total nonfarm payrolls increased by just 29,000 last month, a figure significantly below the 90,000 increase projected in a survey compiled by Bloomberg. August’s employment gains were revised downward by 29,000 to 133,000, while July’s numbers were adjusted to reflect a decline. Thomas Simons, Chief US Economist at Jefferies, stated in a note that this data should effectively end expectations for an October rate increase. He noted that policymakers are likely to remain patient rather than continue with successive 25-basis-point moves.
The Federal Open Market Committee raised rates by 25 basis points last month, marking its first increase in over three years to address inflation that remains persistently above its 2% target. While the central bank’s dot plot previously signaled a further increase could occur later this year, market sentiment has shifted. The CME FedWatch tool indicates a 76% probability that the FOMC will leave its benchmark lending rate unchanged at the end of this month, up from 36% a week ago. Conversely, the odds of a second consecutive 25-basis-point hike dropped to 24% from 64%.
Treasury yields moved higher during the trading session, with the two-year rate rising 5.2 basis points to 4.84% and the 10-year rate increasing 5.1 basis points to 5.29%. In energy markets, oil prices fell after the Group of Seven nations announced a planned release of 100 million barrels of oil and diesel products over four months to ease supply tightness. West Texas Intermediate crude declined 1.5% to $91.46 per barrel, and Brent crude slipped 0.1% to $102.21.
Corporate news also influenced individual stock performance. Tesla shares rose 5.2%, ranking among the top gainers on the S&P 500 after the company reported third-quarter deliveries that exceeded Wall Street expectations. Nvidia gained 1.5%, supported by Morgan Stanley reinstating it as its top pick in semiconductors. In contrast, Nike shares fell 5%, marking the largest decline on the Dow and one of the worst performances on the S&P 500. The sportswear company forecast a revenue decline for fiscal 2027 and outlined a plan to transform its operating model, while Truist Securities warned that ongoing business pressures are delaying its turnaround.
Precious metals also retreated during the session. Spot gold dropped 1.1% to $4,133.78 per troy ounce, and silver lost 1.2% to settle at $60.46 per ounce.