Wall St set for best week since April as payrolls surprise eases rate-hike jitters

A general view shows the New York Stock Exchange, Friday, in New York. AP-Yonhap

Wall Street's main indexes were on track for strong weekly gains on Friday after data showed the U.S. economy unexpectedly shed jobs last month, tempering speculation of the Federal Reserve raising borrowing costs in September.

A Labor Department report showed nonfarm payrolls fell 23,000 in July, far below the 80,000 job additions that economists polled by Reuters had expected.

"For the Fed, the report could keep policymakers on track to hike (rates); however, there may be somewhat less urgency, in our view, with the timing likely dependent on incoming inflation and employment data over the months ahead," said Brian Therien, senior analyst at Edward Jones.

Money market data showed traders pared back expectations for an increase in borrowing costs in September, with odds of a hike now at about 20 percent, from 55 percent before the report, according to data compiled by LSEG.

Under new Chair Kevin Warsh, the U.S. central bank has offered investors little forward guidance on monetary policy, sharpening the focus on economic data and commentary from policymakers.

Payrolls, however, have a tendency to be softer in July, and economists view the labor market as being in "slow hire, slow fire" mode.

At 11:36 a.m. ET, the Dow Jones Industrial Average rose 91.87 points, or 0.17 percent, to 53,976.97, the S&P 500 gained 48.02 points, or 0.62 percent, to 7,757.98, and the Nasdaq Composite was up 343.47 points, or 1.30 percent, to 26,691.82.

All three main indexes were headed for their best weekly showing since April, as robust earnings from several sectors have propelled U.S. stocks higher lately.

A strong show from AI-related companies has quelled some concerns about elevated AI spending not yielding conclusive results, pushing the Dow and the S&P 500 to fresh record highs, while helping the Nasdaq recover from a pullback that briefly pushed it nearly 10 percent below its previous peak.

On Friday, eight of the 11 S&P sectors were trading higher, with consumer discretionary leading gains while energy lagged.

Elon Musk's SpaceX surged 10.6 percent a day after the expiry of the first of several share lockup restrictions following its record public offering in June.

Collaboration software maker Atlassian jumped 30.2 percent while chip company Microchip Tech advanced 13.8 percent after both forecast quarterly revenue above estimates.

The S&P 500 software and services index rose 1.5 percent as software stocks found sure footing. Cybersecurity company Cloudflare also gained 7.3 percent after raising its full-year revenue forecast above estimates.

Chip stocks, which have seen immense volatility in the last few months, were 2.3 percent higher. Heavyweight Nvidia climbed 2.6 percent.

Within the space, memory-linked companies were again under pressure after Thursday's weakness. Sandisk, Western Digital, Micron Technology and U.S.-listed shares of SK Hynix were all lower.

Of the more than 400 companies on the S&P 500 that have reported earnings so far this quarter, more than 85 percent have beaten analysts' expectations, above the 68 percent beat rate seen in a typical quarter since 1994, according to LSEG I/B/E/S data.

Among other movers, vacation rental company Airbnb rose 15.4 percent after beating second-quarter revenue estimates, while Trade Desk dropped 21.7 percent after the ad-tech firm forecast third-quarter revenue below expectations.