12:35 PM EDT, 05/03/2024 (MT Newswires) -- US equity indexes rose, while government bond yields dropped after midday Friday as a steeper-than-expected decline in nonfarm payrolls raised bets on interest rate cuts.

The S&P 500 rose 1% to 5,112.3, with the Nasdaq Composite up 1.7% to 16,113.4 and the Dow Jones Industrial Average 1% higher at 38,605.6. All sectors except consumer staples and energy advanced intraday, with technology the biggest gainer.

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 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.

Reflecting Friday's weak data, 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 US 10-year Treasury yield slumped 5.9 basis points to 4.51%, while a 7.3 basis-point decline pushed the two-year rate lower to 4.8%.

In company news, Apple's ( AAPL ) shares surged 6.9% intraday, among the top gainers on the S&P 500 and the Nasdaq, after its earnings and sales beat market expectations, and it also announced an additional share-buyback program of up to $110 billion.

Amgen's ( AMGN ) shares soared 12% intraday, the leader on the S&P 500, the Nasdaq, and the Dow, after Q1 adjusted earnings outpaced forecasts as sales jumped from a year ago.

Expedia's ( EXPE ) shares sank nearly 14% intraday, the steepest decliner on the S&P 500, reflecting a flurry of price target cuts by Wall Street analysts following Q1 results.

West Texas Intermediate crude oil fell 0.4% to $78.64 a barrel.