Wall Street stocks rise after US employers added 254,000 more jobs than they cut

The S&P 500 was 0.7% higher in early trading and pulling toward its all-time high set on Monday. The Dow Jones Industrial Average was up 266 points, or 0.6%, as of 9:35 a.m.

US stocks are on the upswing, fuelled by a surge of optimism this Friday following a report that showed US employers ramped up hiring last month.

The S&P 500 climbed 0.7% in early trading, edging towards its record high from Monday. Meanwhile, the Dow Jones Industrial Average rose by 266 points, or 0.6%, as of 9:35 a. m.

Eastern time, and the Nasdaq composite soared 1.2%. This rebound is helping to recover losses from earlier in the week, which were sparked by concerns that escalating tensions in the Middle East might disrupt global oil supplies. Although crude prices have risen again on Friday, the increases were relatively modest compared to earlier in the week, as the world awaits Israel's response to Iran’s missile strike from Tuesday. However, the robustness of the US economy has once again become the primary driver of market movements.

Treasury yields saw a significant rise in the bond market after the US government reported that employers added 254,000 more jobs than they cut last month, surpassing August’s hiring rate of 159,000 and exceeding economists' predictions. Lindsay Rosner, head of multi-sector investing at Goldman Sachs Asset Management, described the report as a "grand slam" and suggested that Federal Reserve policymakers, who are striving to sustain economic growth while controlling inflation, "must be smiling."

Friday's report concluded a week of predominantly positive data on the job market, with updates indicating that layoffs remain relatively low and employers are still in search of workers. This information helps to alleviate one of Wall Street’s main concerns: whether the job market will continue to thrive after the Federal Reserve previously maintained interest rates at a two-decade high.

Prior to Friday's jobs report, data had been suggesting a general slowdown in hiring by US employers. This is not surprising considering the Fed's attempts to apply sufficient brakes on the economy to quell high inflation. The impressive figures boost hopes that the US economy will indeed continue to grow, especially now that the Federal Reserve is reducing interest rates to provide it with more momentum.

Last month, the Fed lowered its primary interest rate for the first time in over four years and indicated further cuts will be made throughout the next year. The strength of the jobs data led traders to revise their predictions for how drastically the Federal Reserve will reduce interest rates at its next meeting in November.

They are now predicting just a 9% likelihood that the Fed will implement another larger-than-usual cut of half a percentage point, according to data from CME Group. This is a decrease from the 50/50 chance they predicted a week ago.

The yield on the two-year Treasury saw a significant increase, shooting up to 3.86% from 3.71% late Thursday. The 10-year yield, which factors in future economic growth and inflation more than the two-year yield, rose to 3.95% from 3.85%. In other news, around 45,000 dockworkers at East and Gulf coast ports are set to return to work after their union agreed to suspend its three-day strike until Jan. 15 to allow time for new contract negotiations.

Meanwhile, in the oil market, the price for a barrel of Brent crude, the international standard, increased by 0.8% to $78.24 per barrel and is up slightly over 9% for the week. A barrel of benchmark US crude rose 0.5% to $74.09, up from approximately $68 at the beginning of the week.

Overseas stock markets also saw a rise, with indexes across much of Europe following a strong jobs report from the world’s largest economy. In Asia, Hong Kong’s Hang Seng jumped 2.8% in its latest sharp swerve, soaring just over 10% this week due to excitement about a series of recent announcements from Beijing aimed at bolstering the world’s second-largest economy.