Stocks Rise as US Rate Hike Bets Ease

Major stock indexes rose on Friday as expectations for a Federal Reserve interest rate increase later this month fell after the US jobs data was released. The dollar also fell, while yields rose again amid an ongoing bond market selloff.

The Labor Department reported that nonfarm payrolls increased by 29,000 jobs in September, short of the expected gain of 90,000. Job growth for August was revised down to 133,000 from a previously reported 162,000.

Joseph Purtell, senior vice president at Neuberger Berman, said the labor market print was not as hot as August, but described the labor market as largely stable. He is a portfolio manager and rates trader.

Traders were last pricing in a roughly 80% probability that rates would be unchanged at this month's meeting, compared with 74% before the data. Odds of a December hike were last at around 86% probability.

On Wall Street, the S&P 500 real estate index gained 0.4%, and the small-cap Russell 2000 index gained 0.9% to register its biggest daily gain in a month. The Nasdaq Composite was 1.2% higher, leading Wall Street.

The Dow Jones Industrial Average rose 250.40 points. Higher rates are often viewed as a negative for stocks because they increase borrowing costs for businesses and consumers.

Two top policymakers said this week they wanted more data before deciding what to do next with interest rates. The Federal Reserve last month increased rates for the first time since 2023.