Friday's early afternoon trade: Wall Street rallies on rate cut hopes, trade optimism

Wall Street's main indexes rose about 1% on Friday, as a sharp slowdown in US job growth raised hopes of an interest rate cut, with Washington's decision to delay tariffs on Chinese goods adding to the upbeat mood. The S&P 500 is up about 4.5% this week, putting it on pace for its biggest weekly gain since November on rising expectations that the Fed would turn more accommodative to blunt the impact of escalating trade tensions.
A Labour Department report showed nonfarm payrolls increased by 75,000 jobs last month, much smaller than the 185,000 additions estimated by economists in a Reuters poll, suggesting the loss of momentum in economic activity was spreading to the labour market. "It was a goldilocks number. The number was weaker than expected and we are one step closer to the Fed cutting rates before the end of the year," said Larry Adam, chief investment officer at Raymond James in Baltimore, Maryland.
"An interest rate cut is being priced into the market, but in order to go higher you do need to get progress on the trade front because in the longer term that is the bigger issue for markets." Following the weak jobs data, traders raised their bets that the Federal Reserve will start cutting rates in July followed by two more rate cuts before the end of the year.
Interest-rate sensitive bank stocks dropped 0.86%, while the broader financial sector dipped 0.06% and was the only major S&P sector trading lower. Tariff-sensitive Boeing Co and Caterpillar Inc rose about 1%, while industrial stocks gained 1.03%. At 12:28 pm. ET the Dow Jones Industrial Average was up 287.13 points, or 1.12%, at 26,007.79. The S&P 500 was up 34.23 points, or 1.20%, at 2,877.72 and the Nasdaq Composite was up 132.02 points, or 1.73%, at 7,747.57.