03:17 PM EDT, 08/07/2026 (MT Newswires) -- (Updates with index/price moves and geopolitical news from the first paragraph.)

US equity indexes rose as a surprise drop in nonfarm payrolls lifted the odds for a monetary policy pause in September.

The Nasdaq Composite climbed 1.1% to 26,651.4, with the S&P 500 up 0.5% to 7,752.1 and the Dow Jones Industrial Average higher by 0.2% to 54,015.2.

The July employment report showed nonfarm payrolls fell by 23,000, compared with the 80,000 jobs increase expected in a Bloomberg-compiled poll. Private payrolls rose by 30,000 in July, the same as in June but below the 82,000 expected. Government sector jobs decreased by 53,000.

Looking past the government decline, the increase in private payrolls was below the lowest forecast, Jefferies Chief US Economist Thomas Simons said in a note. Large declines in leisure and hospitality, retail trade and financial services offset strength in construction and healthcare and social assistance, Simons said, adding that the next move from the Federal Reserve is an interest-rate cut, and most likely in December.

The probability of the Federal Reserve keeping its target rate unchanged at 3.5%-3.75% in September surged to 56% on Friday from 45% a day ago and 33% a week ago, according to the CME FedWatch tool.

US Treasury yields fell, with the 10-year yield down 1.4 basis points to 4.66% and the two-year lower by 4.1 basis points to 4.20%.

Iranian lawmakers are debating the wording of a proposed deal with Oman on the Strait of Hormuz, with US President Donald Trump insisting an agreement is getting closer, Bloomberg reported. Iran's Deputy Foreign Minister Kazem Gharibabadi said earlier this week that an understanding with Oman had been reached "in principle," and state TV cited one lawmaker on Friday as saying the final text and details of an agreement with Muscat will be announced "soon," according to the news report.

The Saudi crown prince, Turkish president and Pakistani prime minister have signed a joint defense deal in Mecca stating that "any armed attack against any one of the three states shall be regarded as an attack against them all," Al Jazeera reported. Pakistan is one of the few countries in the world with nuclear weapons.

Saudi Arabia expects imminent coordinated attacks from Iraqi militias north of the Gulf state and from Yemen's Houthis from the south under the supervision of Iran's Islamic Revolutionary Guard Corps, a senior Saudi official told Reuters.

The front-month US West Texas Intermediate crude oil contract jumped 1.2% to $78.24 a barrel, and global benchmark North Sea Brent advanced 1.3% to $83.55 a barrel.