Stocks jump, yields fall on hopes U.S. labor tightness ebbing

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NEW YORK/LONDON, May 3 - Wall Street followed global shares higher on Friday after news that U.S. nonfarm payrolls grew less than expected last month, easing investor anxiety that tight labor markets and stubborn inflation would not let the Federal Reserve cut rates soon.

Traders increased bets in U.S. interest rate futures that the Fed could pivot to an easier policy in September. They now are pricing in two cuts of 25 basis points apiece this year, with a 78% chance of the first coming at the Fed's September meeting, compared with just one cut being forecast before the jobs numbers were released ahead of Wall Street's opening bell.

The yield on benchmark U.S. 10-year notes fell 6.7 basis points to 4.504%. The 2-year note yield, which typically moves in step with interest rate expectations, fell 9.4 basis points to 4.7827%. The MSCI All Country stock index , opens new tab extended gains to 1.133 after the U.S. data, though it was still down about 2% from its record high in March.

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