'Jobs shock? Even better' — easing rate-hike fears lift NASDAQ, Nvidia to intraday records

All three major US stock indexes rose Friday (local time), as weaker-than-expected September jobs data eased concerns about a Federal Reserve interest rate hike at its October meeting.

The Dow Jones Industrial Average closed up 250.40 points, or 0.49 percent, at 51,176.96. The S&P 500 gained 56.27 points, or 0.73 percent, to finish at 7,722.72, while the NASDAQ Composite rose 319.27 points, or 1.19 percent, to close at 27,190.86.

The NASDAQ hit an intraday all-time high before paring its gains. The NASDAQ 100 rose 1.00 percent to close at a record high.

The US Department of Labor reported Friday that nonfarm payrolls grew by 29,000 in September, far below the market consensus of 84,000. July and August payroll figures were also revised downward, reinforcing signs of a cooling labor market. The September unemployment rate edged up to 4.2 percent.

"This is exactly what the market wanted to see from a labor perspective," said Phil Blancato, chief market strategist at Osaic. "Not too hot, not too cold — not too strong, not too weak."

The softer jobs data pushed the probability of the Fed holding rates steady at its October FOMC meeting from 75.6 percent on Friday to 77.9 percent that afternoon, according to interest rate futures markets.

Risk appetite returned to markets, with technology stocks leading the advance.

Nvidia surged more than 3 percent intraday, hitting an all-time high for the first time in five months, before giving back some of those gains as Treasury yields rebounded late in the session. The chipmaker closed up 1.34 percent. AMD rose 2.95 percent and Palo Alto Networks gained 1.76 percent, both closing at record highs.

US Treasury yields initially fell sharply after the jobs report but reversed course and moved higher. Investors concluded that while hiring had slowed, it had not weakened enough to fully rule out further Fed tightening.

The yield on the 10-year Treasury note rose 4.93 basis points to 5.283 percent. The two-year yield, which is more sensitive to monetary policy, climbed 4.6 basis points to 4.833 percent.

Analysts said the slowdown in hiring offered the stock market some relief by tempering immediate tightening fears, but cautioned that elevated Treasury yields and geopolitical uncertainties would continue to fuel market volatility.