Dow rises as weak US jobs data eases Fed rate hike expectations

US stocks moved higher on Thursday after a weaker-than-expected June employment report tempered expectations for further Federal Reserve interest rate hikes, while investors continued to assess the outlook for inflation and economic growth.

The Dow Jones Industrial Average gained 256 points, or 0.49%. The S&P 500 rose 0.39%, while Nasdaq Composite added 0.24%.

The closely watched nonfarm payrolls report showed the US economy added 57,000 jobs in June, well below economists' expectations.

Reuters cited estimates of 110,000 jobs, while economists surveyed by Dow Jones had forecast 115,000.

The unemployment rate came in at 4.2%, compared with expectations of 4.3%.

The softer labor market data pushed Treasury yields lower, with the two-year Treasury note yield declining as investors increased expectations that the Federal Reserve may delay further rate hikes.

Jobs data shifts Fed expectations

Following the employment report, market expectations for additional monetary tightening eased.

According to data compiled by LSEG, the odds of at least one Federal Reserve rate hike this year fell to 75.6%, down from around 84% before the payrolls data was released.

Before the jobs report, Julien Lafargue, chief market strategist at Barclays Private Bank, noted that employment data could be influenced by temporary hiring related to the FIFA World Cup.

"As a result, markets are likely to place greater weight on the June CPI (consumer price index) report due on July 14, as inflation data will offer a cleaner read on the economy," said Lafargue in a Reuters report.

The employment figures followed Wednesday's remarks from Federal Reserve Chair Kevin Warsh, who said inflation risks had eased while reaffirming the central bank's commitment to its 2% inflation target.

Chip stocks mixed after Wednesday's selloff

Some of the technology stocks recovered in trading after leading the previous session's declines.

Micron Technology gained roughly 2%. Arm Holdings advanced 0.46%.

Intel and AMD however fell 0.92% and 1.83%.

Meanwhile, Bending Spoons fell 3% in trading, a day after the Vimeo owner surged 40% during its Nasdaq debut.

Global markets mixed as investors monitor risks

Global equity markets delivered mixed performances on Thursday.

In Asia, South Korea's Kospi dropped 7.89% to its lowest closing level since June 8, while the small-cap Kosdaq fell 6.74%. Samsung declined 9.06%, and SK Hynix plunged 14.57%.

Japan's Nikkei 225 lost 2.47%, while the broader Topix edged up 0.09%. Australia's S&P/ASX 200 finished little changed.

European markets recovered from early weakness, with the pan-European Stoxx 600 rising 0.6% in morning trading as investors rotated into defensive sectors including utilities, healthcare and consumer staples.

Markets also continued to monitor geopolitical developments after the United States and Iran concluded another round of indirect talks on Wednesday without any indication of progress toward a lasting peace, adding another source of uncertainty for investors.