01:37 PM EDT, 05/03/2024 (MT Newswires) -- US equity indexes jumped after midday Friday as a steeper-than-expected drop in nonfarm payrolls sank government bond yields, spurring renewed speculation on prospects for interest-rate cuts.

The S&P 500 rose 1.1% to 5,121.9 with the Nasdaq Composite up 1.9% to 16,136.2 and the Dow Jones Industrial Average gaining 1.1% to 38,646.3. Technoloy led the sector gains with only energy posting a decline.

Nonfarm payrolls rose 175,000 in April, slower than 303,000 previously and below a consensus for a 238,000 increase, while the unemployment rate rose to 3.9% from 3.8%. The consensus was for no change in the jobless rate.

Average hourly earnings were also below expectations, rising 0.2% in April, down from 0.3% previously and below the consensus for a 0.3% increase. Annual pay growth fell to 3.9% from 4.1%, below expectations for a 4% increase.

The Institute for Supply Management's US services index fell to 49.4 in April from 51.4 in March, compared with expectations for an increase to 52 in a survey compiled by Bloomberg. The index indicates contraction, which is in line with the Federal Reserve Banks of Philadelphia, Richmond and Dallas readings, but in contrast with the Kansas City Fed and the S&P Global indexes that suggested expansion.

The probability of the Federal Reserve leaving its interest rate unchanged in September fell to 31% from 38% the previous day, according to the CME Group's FedWatch Tool. The likelihood of the Fed extending its pause in July slid to 61% from 66% a day earlier.

The current monetary policy stance is restrictive, but incoming data will determine the future path of interest rates, Federal Reserve Governor Michelle Bowman said in prepared remarks to the Massachusetts Bankers Association Annual Convention.

Bowman said a further resolution of supply chain issues, increased availability of workers and lower energy prices, rather than a slowdown in demand, were behind the easing of inflation. Meanwhile, geopolitical risks may boost oil prices, undermining the fight against inflation, Bowman said.

The US 10-year Treasury yield slumped 5.7 basis points to 4.51%, while the two-year dropped 6.3 points to 4.81%.

In company news, Apple's ( AAPL ) shares surged 7,1%, among the top gainers on the S&P 500 and the Nasdaq, after earnings and sales beat market expectations, and the iPhone manufacturer also announced an additional share-buyback program of up to $110 billion.

Amgen's ( AMGN ) shares rose 13% intraday, the top gain on the S&P 500, Nasdaq and Dow, after Q1 adjusted earnings outpaced forecasts as sales climbed.

Expedia's ( EXPE ) shares tumbled 14%, the steepest decline on the S&P, reflecting a flurry of price target cuts by Wall Street analysts following Q1 results.

West Texas Intermediate crude oil fell 0.7% to $78.41 a barrel.

Gold fell 0.1% to $2,306.90 an ounce, and silver dropped 0.5% to $26.71.