NEW YORK: Wall Street stocks surged in early trading Friday, after weaker jobs data raised hopes that the US Federal Reserve could soon begin loosening monetary policy.
The Fed has been on an aggressive campaign of monetary tightening since March last year, rapidly raising rates 11 times to tackle inflation, which remains above its long-term target of two percent.
But price increases have come down sharply in recent months and Friday’s jobs report showed the unemployment rate rose to 3.8 percent in August.
Wall St edges higher as inflation data bolsters rate-pause hopes
This has lifted hopes of a “soft landing” where the Fed successfully lowers inflation without triggering a damaging recession.
Shortly after Wall Street opened, the Dow Jones Industrial Average was trading up 0.7 percent at 34,953.68.
The broad-based S&P 500 was also 0.7 percent higher at 4,537.09, as was the tech-heavy Nasdaq Composite Index, which rose to 14,133.06.
The employment report “is consistent with the vast array of data releases that suggest a cooling in the labor market and the labor market coming into balance, something the Fed is looking for,” Quincy Krosby of LPL Financial told AFP.
“This is overall positive for investors, but there’s still that question as to whether or not the Fed can allow inflation to continue to be sticky,” Krosby said.
Among individual firms, shares in Warner Bros. Discovery and Paramount fell amid ongoing strikes in Hollywood, while shares of chip maker Intel rose.
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