S&P 500, Nasdaq, Dow End Week Higher As Weak Jobs Report Cools Rate Hike Bets — NVDA, BA, SPCX, RIVN, APLD In Focus

• The S&P 500 ended Friday 0.7% higher, the Nasdaq 100 rose 1%, and the Dow Jones Industrial Average added 0.5%.
• The Dow Jones consensus called for jobs growth of 84,000 and for the unemployment rate to hold steady at 4.1%. 
• Brent crude hovered at around $100. 

U.S. stock indices ended higher on Friday as employment data showed the economy added fewer jobs than expected, easing fears of an October rate hike. 

The S&P 500 ended Friday 0.7% higher, the Nasdaq 100 rose 1%, and the Dow Jones Industrial Average added 0.5%. The Russell 2000, which tracks small-cap stocks, gained 0.9%.

The SPDR S&P 500 ETF (SPY) rose 0.7%, the SPDR Dow Jones Industrial Average ETF (DIA) rose 0.5%, and the Nasdaq-100 tracking Invesco QQQ Trust (QQQ) added 1%. 

Meanwhile, the VanEck Semiconductor ETF (SMH) and the iShares Semiconductor ETF (SOXX) rose about 2%, tracking gains in Nvidia (NVDA), Micron Tech (MU) and Advanced Micro Devices (AMD). The broader Vanguard Information Technology ETF (VGT) added about 1.1%.

Retail sentiment on Stocktwits for QQQ, SPY, and DIA was ‘bullish’ with ‘high’ message volumes.

US Market Drivers

Unemployment data for September came in below economists' expectations on Friday, with jobs rising 29,000 last month and unemployment climbing to 4.2%. The Dow Jones consensus called for jobs growth of 84,000 and for the unemployment rate to hold steady at 4.1%.

“September’s disappointing employment report showed renewed slowing in job growth heading into the fall, potentially foreshadowing enough moderation in economic activity to delay additional Federal Reserve interest-rate hikes,” Jennifer Timmerman, senior investment strategy analyst at Wells Fargo Investment Institute, told Bloomberg in an interview. 

This, along with multiple commentaries from Federal Reserve executives, helped calm bets of an interest rate hike in the upcoming October meeting. The probability of an October hike significantly dropped to 22% on Friday from 64% a week ago. 

Public addresses by Federal Reserve Vice Chair Philip Jefferson and New York Fed President John Williams conveyed a shared belief that policymakers have ample room to evaluate economic indicators before considering further policy tightening. 

The remarks successfully reined in Wall Street's expectations for a rate increase later this month, illustrating that market participants remain highly attentive to messaging from key central bank leaders.

Treasuries also cooled slightly in early trading on Friday before inching higher, limiting the day’s gains. The benchmark US 10-year Treasury yield ticked up 4 basis points (bps) to close at 5.28%, while the 30-year paper ended at 5.62%. The iShares 20+ Year Treasury ETF (TLT) fell 0.3%. 

Key Trending Stocks

The Federal Aviation Administration (FAA) has determined that a new Boeing (BA) 737 MAX software glitch does not pose a flight-safety issue, The Wall Street Journal reported. 

Space Exploration Technologies (SPCX) climbed sharply on Friday, as investors priced in a rare burst of launch activity and the start of large artificial-intelligence computing contracts.

Nvidia Corp. (NVDA) presents a compelling buying opportunity for investors after a notable divergence between its underlying business performance and its relative market valuation, Stephanie Link, Chief Investment Strategist at Hightower Advisors, explained in an article published on CNBC. 

Applied Digital (APLD) shares jumped in midday trade on Friday, after the AI data-center developer announced a major capacity milestone at its Polaris Forge 1 campus in North Dakota.  

Rivian (RIVN) reported 19,248 vehicle deliveries in the third quarter (Q3), above analysts’ expectations of about 18,000, as the automaker continued to ramp up production of its lower-priced R2 SUV. 

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