US STOCKS-Nasdaq climbs to record after softer jobs data cools rate-hike expectations

US stocks advanced on Friday, with the Nasdaq Composite climbing to an intraday record high, after weaker-than-expected jobs data further dampened expectations for a near-term rate hike from the Federal Reserve. The Labor Department said nonfarm payrolls increased by 29,000 jobs ‌last month, with the count for the prior two months also revised sharply lower, and well below the 90,000 estimate of economists polled by Reuters.

The weaker-than-anticipated data pulled down expectations for a rate hike of at least 25 basis points from the Fed at its meeting later this month to 23.8%, according to CME FedWatch, from 24.4% in the prior session and 64.2% a week ‌earlier. "Today's news was OK insofar as it means the economy isn't roaring," said Robert Bernstone, head of trading at SummitTX Capital in New York. "But how good is that? Yes, ‌it's fine insofar as it takes the short-term rate hike off, but there is a concern over the economy, there is a concern over inflation, so cautious optimism is kind of where people are."

"But with that said, a potential squeeze into the end of the year, or at least for the next month or two, could happen just because it's a hated rally." The Dow Jones Industrial Average rose 217.14 points, or 0.43%, to 51,143.70, the S&P 500 ⁠gained 53.99 ​points, or 0.70%, to 7,720.44 and the Nasdaq Composite ⁠added 307.48 points, or 1.14%, to 27,179.15.

SMALL-CAP STOCKS OUTPERFORM Tempered expectations for an impending rate hike helped boost rate-sensitive stocks such as the S&P 500 real estate index, up 0.5%, and the small-cap Russell 2000 index , which gained about ⁠1% and was on track for its biggest daily gain in a month.

Megacap stocks helped lead the advance, with Nvidia and Tesla the biggest boosts to the S&P 500. Tesla's gains helped lift the S&P ​500 consumer discretionary index more than 1% as the best-performing of the 11 major S&P sectors. A string of recent data showing resilient economic activity and a slower-than-expected increase in ⁠prices, along with comments from two top policymakers cautioning against another rate increase, had already led investors to scale back expectations this week for an October rate hike.

Despite Friday's gains, both the Dow and S&P 500 were on pace for a ⁠fourth ​weekly decline in the past five, but the Nasdaq was on pace for a weekly gain, its fifth in the last six. Nike stumbled 4.5% after the US sportswear company forecast a surprise steep drop in annual revenue due to weakness in China, announced job cuts and decided to shake up its global business divisions.

Shares of data storage providers fell, with ⁠Western Digital tumbling about 10% and Seagate Technology dropping about 11% as the worst performers in the S&P 500 tech index. Nikkei reported that Japanese technology group Toshiba plans to double its ⁠production capacity for hard disk drives used in ⁠AI data centers within fiscal 2027. Advancing issues outnumbered decliners by a 1.93-to-1 ratio on the NYSE, and by a 1.47-to-1 ratio on the Nasdaq.

The S&P 500 posted 10 new 52-week highs and 18 new lows, while the Nasdaq Composite recorded 51 new highs and 191 ‌new lows.