Nasdaq hits record high as weak jobs data reduce rate-hike bets

US stocks rose on Friday, pushing the Nasdaq Composite to a record high after weaker-than-expected employment data reduced the likelihood of a near-term interest rate hike, sending US Treasury yields lower, while falling oil prices further boosted risk appetite.

The Dow Jones Industrial Average rose 306.78 points, or 0.60%, to 51,233.34, while the S&P 500 gained 78.31 points, or 1.02%, to 7,744.76. The Nasdaq Composite jumped 447.84 points, or 1.66%, to 27,319.43.

Semiconductor and megacap stocks led the market higher. Nvidia hit a record high during the session, rising 2.5%, while the Philadelphia Semiconductor Index gained 3.1%. Among other major companies, Elon Musk-led SpaceX climbed 5.5%, Tesla rose 4.1%, and Oracle gained 3%.

The closely watched employment report released by the US Labor Department on Friday showed that nonfarm payrolls increased by just 29,000 last month, while figures for the previous two months were revised sharply lower. Economists surveyed by Reuters had expected payrolls to rise by 90,000.

Lower rate-hike bets support stocks

A series of data showing continued strength in economic activity and a slower-than-expected rise in prices, along with comments from at least two senior Federal Reserve officials opposing another interest rate hike, have increased investor expectations that the central bank will leave rates unchanged this month.

Traders are now pricing in a 20% probability that the Federal Reserve will raise interest rates by 25 basis points in October, down from 26% before the employment report was released.

The two-year US Treasury yield, which is closely tied to interest rate expectations, fell for a second consecutive session.

Sentiment was also boosted by Brent crude falling below $100 a barrel after a report said the European Union had discussed additional releases of diesel and crude oil reserves, although there were no new developments toward a settlement of the conflict in the Middle East.

The CBOE Volatility Index, known as Wall Street’s “fear gauge,” fell to its lowest level in a week and was last trading at 15.67.

Nike shares fell 5.6% after the US sportswear and footwear company forecast a sharp and unexpected decline in annual revenue due to weakness in China. The company also announced job cuts and plans to restructure its global business divisions.