Wall Street surges as weak jobs data eases Fed rate hike fears, chip stocks jump

US stock indices moved higher on Friday after a softer-than-expected jobs data reinforced expectations that the Federal Reserve is likely to keep interest rates unchanged at its September policy meeting.

As of 9:55 a.m. Eastern Time, the S&P 500 rose 0.4%, the Dow Jones Industrial Average rose 0.2%, and the Nasdaq Composite rose 1%.

At the open, the Dow Jones Industrial Average fell 35.8 points, or 0.07%, to 53849.26. The S&P 500 rose 25.2 points, or 0.33%, to 7735.18​, while the Nasdaq Composite rose 186.3 points, or 0.71%, to 26534.66.

Bureau of Labor Statistics data showed that non-farm payrolls fell 23,000 in July following a combined 103,000 downward revision to the May and June figures.

The latest labour market data showed the US unemployment rate easing to 4.1%, a level that has remained relatively stable in recent months as labour force growth slowed due to an ageing population and reduced net migration.

"People have been worried that a much stronger jobs report would give additional reasons for the (Federal Reserve) to raise rates at the September meeting," said Sam Stovall of CFRA.

"However, today's much weaker than expected results has taken that off the table," he added.

The Federal Reserve's next monetary policy meeting is scheduled for September 15-16, when policymakers will decide whether to adjust borrowing costs amid evolving economic conditions.

Although Fed officials have been debating whether additional rate increases may be needed to prevent inflation from becoming entrenched, the latest employment figures strengthened the argument for maintaining current interest rates as the labour market shows signs of cooling.

The U.S. central bank typically cuts interest rates to stimulate economic activity during periods of weakness, while raising rates to curb inflation when price pressures become excessive.

The bond market also reflected shifting expectations for monetary policy. The yield on the benchmark 10-year U.S. Treasury declined to 4.63% from 4.67% before the release of the jobs report, while the 2-year Treasury yield, which is particularly sensitive to interest rate expectations, slipped to 4.19% from 4.22%.

On the geopolitical front, US President Donald Trump said that he believed the war with Iran would be over soon.

Key Stock Movers

Chip stocks were among the session's gainers, with Nvidia up 1.3%, while Broadcom advanced 1.1%.

Airbnb shares jumped 16% after the vacation-rental company's reported stronger quarterly profit and revenue than analysts expected.

Stocks of collaboration software maker Atlassian rallied 34.5%, while chip company Microchip Tech advanced 11.4% after both forecast quarterly revenue above estimates. Cloudflare shares gained 12% after the cybersecurity company raised its full year revenue forecast.

Bullion

Gold prices rose on Friday after an unexpected fall US non-farm payrolls for July dashed Fed rate hike hopes.

By 09:09 a.m. EDT (1308 GMT), spot gold jumped 2.6% to $4,348.87 per ounce. US gold futures climbed 2.5% to $4,408.00.

Among other metals, spot silver gained 4.5% to $64.26 per ounce, platinum firmed 1.4% to $1,753.09, and palladium rose 0.4% to $1,375.75.