Payroll numbers that fell short of forecasts trimmed market expectations for a rate rise at the Federal Reserve's next policy meeting, leaving stock prices higher as trading wrapped up for the week. Labor Department figures placed nonfarm payroll growth at just 29,000 for the latest reporting period, with downward revisions to the two months before it, leaving the overall picture roughly 61,000 positions below what surveyed economists had forecast.
Data that fell short of forecasts pushed the probability of a rate increase of at least 25 basis points at the Fed's late-October meeting down to 22.7%, per CME FedWatch, from 24.4% the previous session and 64.2% seven days prior. Robert Bernstone, head of trading at SummitTX Capital in New York, noted that the figures pointed to an economy that was not expanding at full speed, though he questioned how much comfort that actually provided.
The Dow Jones Industrial Average climbed 260.15 points on the session, landing at 51,186.71, a gain of 0.51%. Reduced expectations around a near-term interest-rate increase lifted equities that tend to move with borrowing-cost shifts, among them the S&P 500 real estate index and the small-cap Russell 2000, the latter advancing roughly 1% for its strongest single-session performance in about four weeks.
Nvidia and Tesla were among the heaviest contributors to S&P 500 gains, with large-cap technology names driving much of the index's upward movement. A roughly 1% advance in the S&P 500 consumer discretionary index, driven by Tesla's momentum, placed that grouping at the top of all 11 major S&P sectors for the session.
Mounting evidence of steady economic output and inflation rising at a pace below forecasts, combined with cautionary remarks from two senior policymakers about further tightening, pushed traders to pare back their bets on an October rate increase throughout the week. Heading into the weekend, the Dow and S&P 500 notched their fourth losing week across the past five sessions despite Friday's bounce, while the Nasdaq managed to finish the stretch in positive territory — its fifth winning week out of the last six.
Nike's shares fell after the sportswear company projected an unexpected decline in full-year revenue, attributed in part to softening demand in China, while also announcing workforce reductions and a restructuring of its global business units. Data storage stocks retreated during the session, with Western Digital and Seagate Technology posting the steepest losses among technology constituents of the S&P 500.
Toshiba, the Japanese technology conglomerate, has outlined plans to bring its hard disk drive manufacturing output for AI data centre applications to twice its current level before the close of fiscal 2027.
