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US job growth surges in Sept; unemployment rate falls to

4.1%

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Spirit Airlines ( SAVE ) tanks after report of bankruptcy filing

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Futures up: Dow 0.48%, S&P 500 0.70%, Nasdaq 0.99%

(Updated at 08:44 a.m. ET/1244 GMT)

By Johann M Cherian and Purvi Agarwal

Oct 4 (Reuters) -

Wall Street's main indexes were set for a higher open on

Friday after a crucial labor report eased concerns about a rapid

cooldown in the jobs market, while investors remained vigilant

for potential escalations in the Middle East conflict.

A

Labor Department report

showed nonfarm payrolls rose 254,000 in September, more

than the estimate of 140,000, according to economists Reuters

polled. The unemployment rate dipped to 4.1% for the previous

month, versus an estimate of 4.2%.

Odds of a 25-basis-point reduction at the U.S. Federal

Reserve's November meeting rose to 85.5%, up from more than 71%

before the data, according to the CME Group's FedWatch Tool.

"For the economy, it means that a soft landing is

happening. We continue to add jobs at a rapid clip and the

unemployment rate continues to tick down," said Ross Mayfield,

investment strategist at Baird.

"It means the Fed is unlikely to cut (by) 50 basis

points in November or December, certainly, and maybe even take a

pause in November."

Dow E-minis were up 204 points, or 0.48%, S&P

500 E-minis were up 40.25 points, or 0.70% and Nasdaq

100 E-minis were up 197.75 points, or 0.99%.

Futures tracking the small-cap Russell 2000 index

rose more than 1%.

Yield on two-year Treasury notes rose to

3.87% after the data was released as investors priced out a

larger reduction by the Fed in November.

Rate-sensitive growth stocks such as Tesla

added 2.2%, Amazon.com ( AMZN ) climbed 1.9%, while chip giant

Nvidia ( NVDA ) rose 1.3% in premarket trading.

The labor market has been under greater scrutiny after the

U.S. central bank slashed interest rates in September by a rare

50 basis points to stave off further weakening in employment.

Traders expect borrowing costs to fall by an additional 56

bps before the year ends, down from an estimate of nearly 79 bps

a week ago, according to data compiled by LSEG, as recent

reports pointed to strong service sector activity in September.

Wall Street's main indexes closed lower on Thursday and were

set to finish the first week of October on a weaker footing as

investors were nervous about escalating tensions in the Middle

East and the workers' strike earlier this week.

Analysts said the events could impact the inflation and

labor figures for October.

Energy stocks such as Occidental Petroleum ( OXY ) edged

higher 0.71% while Exxon Mobil ( XOM ) and Chevron ( CVX ) crept

up 0.60% each as crude prices surged on worries of supply

disruptions in the Middle East due to the widening regional

conflict.

The S&P 500 Energy sector is on track to log its

biggest weekly jump since March 2023.

Meanwhile, ports on the East and Gulf Coasts began reopening

late on Thursday after workers reached a wage deal, but clearing

the cargo backlog will likely take time. U.S. shares of Zim

Integrated Shipping Services were down 11%.

Among others, Spirit Airlines ( SAVE ) nosedived 33% after a

report showed the carrier was in talks with bondholders about

the terms of a potential bankruptcy filing after its failed

merger with JetBlue Airways ( JBLU ).