U.S. stocks rise as jobs report shows unexpected cut of 23,000 jobs, easing rate-hike concerns

U.S. equity markets advanced on Friday after the Labor Department reported an unexpected loss of 23,000 jobs in the latest month, a revision that also trimmed payrolls for June and May by a combined 103,000. The S&P 500 climbed 0.6% to 7,757.64, the Dow Jones Industrial Average rose 0.3% to 54,036.93, and the Nasdaq gained 1.3% to 26,690.62, with technology shares such as Nvidia and Broadcom leading the rally.

Bond yields retreated, with the 10-year Treasury rate slipping to 4.64% and the two-year yield falling to 4.20%, reflecting market expectations that the Federal Reserve may have more time before tightening monetary policy.

"Although the stock market is likely to welcome the dovish implications of the report, investors should be wary of the future growth potential of an economy where fewer people are working," said Peter Graf, chief investment officer at Amova Asset Management Americas.

Analysts noted that the weaker jobs data could reduce pressure on the Fed to raise rates at its September meeting, though upcoming inflation figures, including the consumer price index, will remain decisive.

"Today’s weak payrolls print may ease the pressure on the Fed to raise rates at its September meeting, but next week’s inflation data will still likely be the deciding factor," said Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management.

The report arrives as corporate earnings for the second quarter show strong profit growth, with nearly 90% of S&P 500 companies having reported results and analysts projecting a 50% rise in overall earnings. Airbnb shares jumped after posting better-than-expected quarterly results, while oil prices rose 1.3% to $83.55 a barrel amid ongoing geopolitical tensions in the Middle East.