US stocks moved higher in early trading as a notable slowdown in American job growth prompted speculation that the Federal Reserve will not be pressured into raising interest rates anytime soon, sending bond yields lower.

At 10:12 New York time, the S&P 500 rose 0.9%, the Nasdaq 100 climbed 1.4%, and the Dow advanced 0.5%. Money markets are no longer fully pricing in another Fed rate hike in 2026. The rebound extended a rally in Treasuries after a prior selloff had pushed yields to multi-year highs. Falling crude oil prices also lifted sentiment, with the Group of Seven planning to release up to 100 million barrels of diesel and crude.

Data released Friday by the US Bureau of Labor Statistics showed nonfarm payrolls rose by 29,000 in September, with the prior two months revised lower. The increase fell short of expectations. The unemployment rate rose to 4.2%, partly reflecting growth in the labor force.

Seema Shah of Principal Asset Management said the weaker-than-expected jobs report should significantly reduce the likelihood of a Fed rate hike in October. She noted that slowing payroll growth, decelerating wage gains and a rising unemployment rate all indicate the labor market is cooling rather than re-tightening.

Lindsay Rosner of Goldman Sachs Asset Management said the soft data does not support the view that the labor market is re-tightening. She said the base case remains one more rate hike in December, though persistent market stress and further gains in energy prices could force the Fed to act this month.

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