US stocks jump as employers unexpectedly cut 23,000 jobs, raising hopes that rate hikes can wait

U.S. stock indexes rose Friday after employers unexpectedly cut 23,000 jobs in July, prompting investors to bet the Federal Reserve may delay interest-rate increases. The S&P 500 gained 0.6% to 7,757.64, the Nasdaq composite jumped 1.3%, and Treasury yields fell as bond markets reacted to weaker labor data. The jobs report also included downward revisions of 103,000 positions for June and May combined.

The weak employment figures contradicted expectations for job growth and painted a dimmer picture of an economy that had shown relative strength in hiring. Treasury yields fell, with the 10-year dropping to 4.64% from 4.67%, as markets priced in a lower probability of near-term rate increases. Technology stocks led gains, with Nvidia rising 2.3% and Broadcom up 1.7%.

The Fed faces competing pressures: supporting employment while combating inflation driven partly by rising oil prices. Market expectations for a September rate cut fell to 42% from 55% a day earlier, according to CME FedWatch. Upcoming inflation data, including the July consumer price index next week, will be critical to the Fed's next policy decision.