Stocks climb after shaky start to trading, economic data

NEW YORK (AP) — Wall Street is rallying Friday, after swinging through a shaky start to trading, on hopes that inflation may continue to cool following some mixed readings on the U.S. economy.

The S&P 500 was 1.1% higher, as of 10:20 a.m. Eastern time, after an early 1.2% pop disappeared almost entirely within minutes. The Dow Jones Industrial Average was up 373 points, or 1.1%, at 33,303, and the Nasdaq composite was 0.9% higher.

Markets worldwide got an initial jolt from the U.S. jobs report. On the upside for them, it showed workers’ wage gains are slowing, which could mean easing pressure on the nation’s high inflation. On the downside, it also showed hiring across the job market may still be too strong for the Fed’s liking, even after its fusillade of rate hikes last year.

Analysts warned trading may remain turbulent in the coming hours and weeks as investors keep trying to handicap whether the economy can avoid a recession. Much of the trading is based entirely on expectations for what the Fed's future rate hikes: Higher rates slow the economy by design, hoping to grind down inflation, while also threatening to cause a recession and dragging down prices for all kinds of investments.

Perhaps the clearest action for investors was in the bond market, where yields for the two-year Treasury fell to 4.31% from 4.48% just before the release of the data on wages.

That yield tends to track expectations for Fed action, and some investors are increasing bets that the central bank will dial down the size of its next rate hike following Friday's data on the economy.

Key for them is the reading showing wages for workers across the country rose 4.6% in December from a year earlier. It’s the smallest raise for workers since two summers ago, and it came despite economists’...