Wall Street Rallies, Small Caps Outperform On Strong Jobs Report, Chinese Stocks Soar To 32-Month Highs: What's Driving Markets Friday?

A stronger-than-expected September jobs report fueled gains on Wall Street, overshadowing investor concerns that had been driven by escalating geopolitical tensions in the Middle East earlier this week.

The U.S. economy added 254,000 nonfarm payroll jobs in September, a significant jump from August's 159,000 and well above forecasts of 140,000. This marked the most robust employment growth since March 2024.

In addition, the unemployment rate dropped more than anticipated to 4.1%, while average hourly earnings also surpassed expectations, signaling a red-hot labor market.

Small-cap stocks outpaced their large-cap peers as worries about an economic slowdown subsided further. Meanwhile, traders adjusted their outlook for the Federal Reserve's November meeting, reducing the probability of a 50-basis-point rate cut from 30% to just 10% as the stronger jobs data diminished the need for a more aggressive policy move.

U.S. Treasury yields rose sharply in response to the solid labor market data. The 2-year yield climbed by 20 basis points, while the 10-year yield increased by 12 basis points.

Chinese equities continued their upward trajectory, driven by ongoing domestic stimulus measures. The iShares China Large-Cap ETF FXI reached levels last seen in February 2022, just before Russia's invasion of Ukraine.

Gold dipped 0.3% as the U.S. dollar strengthened and bond yields climbed. Oil prices extended their rally for the fourth consecutive session, with WTI crude hitting $75 per barrel during intraday trading.

Bitcoin BTC/USD surged 2.2%, climbing to $62,000.

Friday’s Performance In Major US Indices, ETFs

Major Indices	Price	1-day %chg
Russell 2000	2,203.80	1.1 %
Nasdaq 100	19,932.47	0.7%
S&P 500	5,727.63	0.5%
Dow Jones	42,146.54	0.3%

According to Benzinga Pro data:

• The SPDR S&P 500 ETF Trust SPY rose 0.5% to $570.47.
• The SPDR Dow Jones Industrial Average DIA inched 0.3% higher to $421.66.
• The tech-heavy Invesco QQQ Trust Series QQQ rose 0.7% to $484.95.
• The iShares Russell 2000 ETF IWM rallied 1.2% to $218.77.
• The Financial Select Sector SPDR Fund XLF outperformed, up 1.2%. The Real Estate Select Sector SPDR Fund XLRE lagged, down 0.8%.

Friday’s Stock Movers

• Semiconductor stocks rallied, with Advanced Micro Devices Inc. AMD leading gains, up over 4%.
• Rivian Automotive Inc. RIVN fell over 4% on a quarterly revenue miss.
• Spirit Airlines Inc. SAVE tumbled 26%, amid bankruptcy discussions with creditors following the failed merger with JetBlue Airways Corp. JBLU. Peers such as American Airlines Group Inc. AAL and United Airlines Holdings Inc. UAL rallied on the news, up by 5.4% and 3.6%, respectively.

Read now: ‘Blowout’ September Jobs Report Spurs Reactions: 6 Economists Say Aggressive Fed Rate Cuts May Face Obstacles

Image created using artificial intelligence via Midjourney.