Stock market today: Wall Street keeps rising with hopes for easier interest rates

By STAN CHOE
AP Business Writer

NEW YORK (AP) — U.S. stocks are adding to their records Friday after a mixed jobs report appeared to bolster the case for easier interest rates later in the year.

The S&P 500 was 0.5% higher in morning trading and on track for its 17th winning week in the last 19. The Dow Jones Industrial Average was up 160 points, or 0.4%, as of 10 a.m. Eastern time, and the Nasdaq composite was 0.8% higher.

Treasury yields eased in the bond market immediately after the release of a jobs report that economists called “all over the place.” It showed employers hired more workers last month than economists expected, but wages for workers rose by less than forecast. It also said job growth in January was not nearly as hot as earlier thought.

The job market and overall economy are in a delicate spot, where Wall Street wants them to continue growing, but not so much that it raises pressure on inflation.

The ultimate goal is for inflation to cool enough to convince the Federal Reserve to lower its main interest rate from its highest level since 2001. Such a move would release pressure on the financial system and the economy, which has so far remained out of a recession despite high interest rates.

“Big picture: these were helpful numbers for the Fed to gain confidence,” said Lindsay Rosner, head of multi-sector fixed income investing at Goldman Sachs Asset Management.

Following the report, bets built on Wall Street that the Fed will likely start cutting in June. The yield on the two-year Treasury, which follows expectations for the Fed, fell to 4.44% from 4.51% late Thursday.

The yield on the 10-year Treasury, which also focuses on longer-term economic growth, likewise slumped immediately after the report, though it pared its drop later in the morning. It was at 4.07%, down from 4.09%.

Wall Street loves lower interest rates because they encourage people and companies to borrow, which can strengthen the economy, and because they boost prices for stocks and other investments.

“Things are good, but not great, and they’re getting a touch worse,” Brian Jacobsen, chief economist at Annex Wealth Management, said about the jobs report. “The payroll gains are still fantastic, but we’re not as strong as we thought we were with the prior months’ numbers being revised down.”

Fed Chair Jerome Powell said a day earlier that the central bank is “not far” from cutting interest rates. It just needs additional data confirming that inflation is heading sustainably down to its 2% target.

In the meantime, the hope on Wall Street is that the remarkably resilient economy will drive growth in profits for companies.

Gap climbed 3.4% after the retailer reported stronger profit and revenue for the latest quarter than analysts expected. The retailer said an important sales trend returned to growth at both its Old Navy and Gap stores. The owner of Banana Republic and Athleta also gave a forecast for upcoming sales this year that was a touch higher than analysts’ estimates.

Gun maker Smith & Wesson Brands leaped 26.2% after likewise reporting stronger profit than expected for the latest quarter. It said its shipments grew faster than the overall firearm market.

Nvidia was the strongest force lifting the S&P 500 upward, as has become almost ritual on Wall Street, after rising 3.2%. It’s been on a nearly unstoppable run and has soared more than 90% this year after more than tripling last year amid a frenzy around artificial-intelligence technology.

On the losing end was Costco Wholesale, even though it also reported stronger profit than expected. Its stock fell 5.3% after its revenue fell shy of forecasts.

Broadcom also fell after reporting stronger results than expected. It dropped 3.7% after giving a forecast for revenue this upcoming year that was a touch below analysts’ expectations.

In stock markets abroad, indexes rose modestly across much of Asia and Europe. South Korea was a standout as the Kospi jumped 1.2%.

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AP Business Writers Matt Ott and Yuri Kageyama contributed.