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US Stocks Rise Near Their Record 10/02 09:46
Some relief is returning to the rattled U.S. bond market on Friday after the
latest jobs report cooled worries that a potentially hot U.S economy could make
inflation much worse. That's helping U.S. stocks climb near their all-time high.
NEW YORK (AP) -- Some relief is returning to the rattled U.S. bond market on
Friday after the latest jobs report cooled worries that a potentially hot U.S
economy could make inflation much worse. That's helping U.S. stocks climb near
their all-time high.
The S&P 500 rose 0.9% and pulled within 0.8% of its record set in August.
The Dow Jones Industrial Average was up 220 points, or 0.4%, as of 10 a.m.
Eastern time, and the Nasdaq composite was 1.4% higher.
All of Wall Street got a jolt after the U.S. government said employers
across the country added 29,000 jobs to their payrolls last month. That was
fewer than economists expected and a slowdown from August's hiring rate of
133,000.
More importantly for financial markets, it tamped down concerns that the
U.S. economy could be so strong that it gives inflation enough fuel to drive
even higher. Inflation has remained much higher than anyone would like, and the
Federal Reserve recently raised its main interest rate for the first time in
three years to try to rein in the fast increases for the cost of living.
Even though Americans are feeling more frustrated about inflation and their
finances, the overall U.S. economy has been chugging along. Earlier this week,
the U.S. government said the economy's growth in the spring was stronger than
earlier thought, driven by businesses building AI data centers and spending by
consumers.
Friday's jobs report eased Wall Street's concerns about a potentially
overheating economy driving inflation higher, at least for now. And it pushed
traders to pull back on bets the Fed will hike its main interest rate later
this month at its next meeting. They now see just an 18% probability of that,
down from 64% a week ago, according to data from CME Group.
"This report strengthens the case for the Federal Reserve to remain
patient," according to Adam Schickling, senior economist at Vanguard. "The
labor market has not deteriorated sharply, but there is also little evidence
that it has meaningfully strengthened, giving policymakers reason to wait for
additional data."
The pullback in expectations for an October rate hike helped yields ease for
all kinds of Treasury yields.
The centerpiece of the U.S. bond market, the 10-year Treasury, saw its yield
fall to 5.20% after it neared 5.35% on Thursday. It and other longer-term
yields have been touching their highest levels in two decades.
An easing of yields can help the economy by making it more affordable for
everyone to borrow money. Higher yields, meanwhile, tend to undercut prices for
stocks and other investments.
Of course, a solid U.S. economy and worries about inflation are only a
couple of the many drivers that have caused yields to jump in bond markets
worldwide.
Concerns about the big spending that governments are doing, along with the
mountains of debt they're racking up, continue. In France, for example, yields
have been particularly shaky as the government contends with its record debt
and strained budget.
On Friday, a drop for oil prices helped take some of the pressure off bond
markets worldwide. The price for a barrel of Brent crude fell 2.3% to $99.91.
It's been swinging sharply on uncertainty about when the war with Iran will
allow the global oil industry to return to normal.
Lower yields in the bond market help investors justify paying higher prices
for stocks, even those that get criticized for being too expensive. That helped
companies in the artificial-intelligence industry add to some of their already
stellar gains.
Nvidia's 2.8% rise was the single strongest force lifting the S&P 500.
Tesla rallied 4.2% after the electric-vehicle company said it delivered
486,532 vehicles to customers during the latest quarter, more than analysts
expected.
Such gains more than made up for a 6% drop for Nike. The sneaker and
athletic apparel company reported a stronger profit for the latest quarter than
analysts expected, but its revenue weakened by more than feared. Nike also gave
a forecast for profit this fiscal year that fell short of analysts'
expectations.
In stock markets abroad, indexes bounced back in Europe from sharp losses
taken a day earlier after bond yields swung sharply across the continent.
Asian indexes were mixed, with Hong Kong's Hang Seng dropping 2.6% but South
Korea's Kospi adding 0.5%.
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