NEW YORK (AP) — U.S. stocks are rising to more records on expectations that the Federal Reserve will have to cut interest rates soon to help the economy. The S&P 500 climbed 0.4% Friday. The Dow Jones Industrial Average added 93 points, and the Nasdaq composite gained 0.7%. The action was much stronger in the bond market, where Treasury yields tumbled following the latest weaker-than-expected update on the U.S. job market. That raised expectations for a cut to rates by the Fed later this month. While the data on the job market is disappointing, it’s still not so weak that it’s screaming a recession.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Stocks rose and bond yields fell in premarket trading Friday after the U.S. government delivered the latest in a series of weak reports on the job market.
Futures for the S&P 500 rose 0.2%, while Nasdaq futures gained 0.6%, propelled by another strong earnings report from chipmaker Broadcom. Futures for the Dow Jones Industrial Average fell slightly.
In the bond market, Treasury yields fell after the government said U.S. employers added just 22,000 jobs last month as the labor market continued to cool under uncertainty over President Donald Trump’s economic policies, particularly tariffs.
The slowdown in the job market could bolster the case for Federal Reserve to cut its main interest rate, which Fed Chair Jerome Powell has already signaled as a possibility. An announcement of a rate cut at the Fed's next meeting Sept. 16-17 could reduce other borrowing costs in the economy, including mortgages, auto loans, and business loans.
While such cuts to interest rates can kickstart the economy and job market, they can also accelerate inflation, another big concern for the U.S. central bank.
Last month’s grim July jobs report, which showed job gains of just 73,000 and included massive downward revisions for June and May, sent financial markets spiraling. Following that report, Trump announced that he had fired the head of the agency that compiles the monthly data.
In equities trading, Broadcom's third-quarter revenue beat Wall Street expectations as its AI revenue grew 63% over the same period a year ago. The California company issued strong fourth-quarter guidance that it says will come in 24% higher than last year's quarter. Its shares jumped 14% in premarket trading.
On the losing side early was Lululemon, the yoga and athletic gear maker, which tumbled more than 20% before the bell. The company fell short of its second-quarter revenue guidance and blamed slumping U.S. sales.
Elsewhere, at midday in Europe, Germany's DAX and the CAC 40 in Paris each edged up 0.1%, while Britain's FTSE 100 rose 0.4%.
In Tokyo, the Nikkei 225 added over 1% to 43,018.75 after data released Friday showed Japan's labor cash earnings rose 4.1% year-on-year in July, up from 3.1% in June. Another report showed household spending climbed 1.4% in July from the same month a year ago, marking growth for the third month in a row.
Trump also signed an executive order Thursday implementing the U.S. trade deal with Japan negotiated in July, with lower tariffs on Japanese car imports.
“Solid wage growth is likely to support recovery in spending and sustainable inflation,” ING Economics said in a commentary, adding Friday’s data reinforces its expectation that the Bank of Japan will hike rates in October.
Chinese markets rebounded after three days of decline. Hong Kong's Hang Seng index jumped 1.5% to 25,434.93, while the Shanghai Composite index added 1.2% to 3,812.51.
South Korea's Kospi edged up 0.1% to 3,205.12, and Australia's S&P/ASX 200 rose 0.5% to 8,871.20.
Taiwan's Taiex jumped 1.3%, while India’s BSE Sensex bucked the trend, falling less than 0.1%.