01:35 PM EDT, 10/04/2024 (MT Newswires) -- US equity indexes rose with government bond yields as the labor market added many more jobs than expected, signaling a solid economy and easing concerns about the crude oil surge.

The Nasdaq Composite rose 0.9% to 18,075.2 with the S&P 500 up 0.6% to 5,731.5 and the Dow Jones Industrial Average gaining 0.5% higher to 42,208.7 after midday Friday. Consumer discretionary, energy and financials led the gainers, and real estate paced the trio of decliners.

In economic news, nonfarm payrolls climbed by 254,000 in September, the Bureau of Labor Statistics reported. The consensus was for a 150,000 increase in a survey compiled by Bloomberg. Gains for August were revised up by 17,000 and by 55,000 for July.

The unemployment rate declined to 4.1% from August's 4.2%, which was the market view for September. Average hourly earnings grew by 0.4% sequentially, ahead of the 0.3% pace modeled by the Street. The annual measure increased by 4%, beating expectations for growth of 3.8%.

Following the jobs data, the probability of a 25 basis-point cut in the Fed's target rate soared to 95% from 68% a day earlier, according to the CME Group's FedWatch Tool. The remaining 5% likelihood was for rates to be left unchanged. The CME data implies a 50 basis-point reduction on Nov. 7 is off the table, compared with a 32% probability a day earlier.

"The September employment report was much stronger than expected, with job growth blowing past expectations, the unemployment rate declining and wage growth accelerating," Oxford Economics lead economist Nancy Vanden Houten said in an email to MT Newswires. The report makes another 50-basis-point reduction unlikely, and the Fed will likely deliver a 25-basis-point cut both in November and December, she said.

US Treasury yields jumped with the 10-year yield up 11.9 basis points to 3.97%, and the two-year rate climbing 19.9 basis points to 3.91%.

The CBOE Volatility Index, also known as the fear gauge for investors, dropped 6.7% to 19.12.

Gold fell 0.6% to $2,663.31 an ounce, and silver declined 0.2% to $32.41, erasing earlier gains.

West Texas Intermediate crude oil jumped 2.3% to $75.43 a barrel, extending gains from Thursday when President Joe Biden revealed the US is in discussions with Israel regarding a retaliatory attack on Iranian oil infrastructure.

"US intelligence has previously highlighted the risk to the Kharg Island oil export facilities, which function as a central nervous system for Iran's oil sector," handling most of the country's crude exports," said Helima Croft, head of global commodity strategy and MENA research at RBC Capital Markets.

In company news, Stifel adjusted its price target for Norwegian Cruise Line Holdings ( NCLH ) to $29 from $27 while maintaining its buy rating. Shares of the cruise liner rose 3.4%.

Guggenheim lifted Home Depot's ( HD ) price objective to $450 from $390 while keeping its buy rating. Shares of the home improvement retailer still fell 1%, the steepest decliners on the Dow.