Why Wall Street is so happy to see the job market slowing down

The April jobs report was weak, but stock traders are cheering because the slowing labor market could mean a rate hike sooner than later.

• US stocks soared on Friday after a light April jobs report gave investors hope of a rate cut sooner than later.
• Expectations have been pushed out in recent weeks following a series of hot economic data.
• The US economy added 175,000 jobs last month, below expectations of 238,000.

US stocks soared on Friday after a light April jobs report sent bond yields tumbling and increased the chances of an interest rate cut from the Federal Reserve later this year.

The US economy added 175,000 jobs in April, well below economist forecasts of 238,000 jobs and far short of 303,000 added in March. Meanwhile, the unemployment rate ticked higher to 3.9% from 3.8%.

The light jobs report should give the Fed more flexibility in speeding up the timing of rate cuts, and bond yields fell significantly with that sentiment in mind. The 10-year Treasury dropped 10 basis points to 4.48%. 

Investors have been closely watching economic data — and the Fed's reaction to it — for signs of when the central bank will lower interest rates. In recent weeks, expectations for cuts have been pushed out as new data has come in hot. The market is currently in a situation where negative economic news is positive for risk assets like stocks.

"The April jobs report was just what the market ordered," Russell Price, chief economist at Ameriprise, wrote in a client note. "Job growth was solid and well distributed, but the pace eased considerably relative to the first quarter's surprisingly strong gains."

Today's jobs report was the "first material 'downside surprise' in over two years," added Key Wealth CIO George Mateyo in comments to Business Insider. "Yet, the weakness was not so weak to suggest that the labor market is rolling over. It was a slowdown that the Fed and many market participants have been wanting for some time."

Also helping boost stocks on Friday is Apple, which surged about 7% after it reported a better-than-feared fiscal second-quarter earnings report. The iPhone maker also launched a historic $110 billion stock buyback program and increased its quarterly dividend by 4%, which was cheered by investors.

Here's where US indexes stood at 10:30 a.m. on Friday: 

• S&P 500: 5,109.27, up 0.9%
• Dow Jones Industrial Average: 38,576.90, up 0.9% (352 points)
• Nasdaq Composite: 16,098.73, up 1.6%

Here's what else is going on today: 

• Here's a breakdown of Apple's second-quarter earnings report and comments from the company's earnings call.
• The stock market's current bull run will end in either a bubble or a recession, according to Bank of America strategist Michael Hartnett.
• Apple's $110 billion stock buyback program is worth more than the total value of companies including Boeing, Chipotle, and Airbnb.
• Treasury Secretary Janet Yellen voiced concerns to Congress about how difficult it is to buy a starter home in America.

In commodities, bonds, and crypto: 

• West Texas Intermediate crude oil dropped 0.08% to $78.89 a barrel. Brent crude, the international benchmark, rose  0.11% to $83.76 a barrel. 
• Gold edged higher by 0.06% to $2,311.20 per ounce. 
• The 10-year Treasury yield fell 10 basis points to 4.48%. 
• Bitcoin jumped 3.49% to $61,148.