Investing.com -- U.S. stocks rose sharply Friday after the release of a stronger-than-expected jobs report, which lessened the likelihood of a recession in the world's largest economy.
By 09:40 ET (13:40 GMT), the Dow Jones Industrial Average contract was up 275 points, or 0.7%, S&P 500 traded 45 points, or 0.8%, higher and NASDAQ Composite climbed 205 points, or 1.1%.
Despite these gains, all three major averages are on pace to snap a three-week win streak as the volatile situation in the Middle East has weighed on risk sentiment.
Nonfarm payrolls impress
US employment growth was far stronger than expected in September, with nonfarm payrolls rising by 254,000 jobs last month, increasing from an upwardly-revised mark of 159,000 in August. Economists had anticipated a reading of 147,000.
The jobless rate also slowed to 4.1% from the prior month's 4.2%.
While this healthy jobs data potentially dents the chances of another jumbo interest rate reduction by the Federal Reserve at its last two meetings of the year, Fed Chair Jerome Powell had already guided towards more traditional 25 basis-point cuts in a speech earlier this week.
"Economic data out of the US has been quite healthy for the last couple of weeks, with this blow-out jobs report following the solid services ISM, subdued weekly claims, and favorable GDP/GDI revisions," said analysts at Vital Knowledge, in a note.
"It seems very likely the Fed will slow the pace of easing to 25bp in Nov, but stocks shouldn’t mind given rate cuts are still happening (the Funds Rate should still be around ~3-3.25% by the fall of 2025) while the growth backdrop seems much healthier than previously anticipated."
Spirit Airlines slumps
In the corporate sector, Spirit Airlines (NYSE:SAVE) stock slumped 33% after Bloomberg reported the carrier’s attempts to restructure its debt and avoid filing for bankruptcy have hit a snag after talks with bondholders failed to result in a deal.
Rivian Automotive (NASDAQ:RIVN) stock fell 4% after the EV manufacturer slashed its full-year production forecast and delivered fewer vehicles in the third quarter than expected, as the startup grappled with a parts shortage.
Elsewhere, the strike by US dockworkers looks set to end after their union and the group representing large ocean shipping firms reached an agreement, which is expected to result in a wage hike of roughly 62% over six years.
Crude on track for hefty weekly gains
Oil prices rose Friday, on course for their largest weekly gain in over a year on the increased risk of a growing conflict in the Middle East.
By 09:40 ET, the Brent contract gained 0.5% to $78.00 per barrel, while U.S. crude futures (WTI) traded 0.4% higher at $74.03 a barrel.
Brent crude futures were set to gain around 9% for the week - its steepest since February 2023, while U.S. crude futures' 9% weekly rise would be the largest since March last year.