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Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S.

Brendan Mcdermid | Reuters

Stock futures jumped sharply Friday after a softer-than-expected April jobs report boosted hopes that the Federal Reserve could start cutting interest rates soon.

Futures tied to the Dow Jones Industrial Average gained 502 points, or 1.3%. S&P 500 futures rose 1.1%, while Nasdaq 100 futures advanced about 1.6%. Apple shares advanced 7% following first-quarter results.

Friday’s nonfarm payrolls report showed 175,000 jobs gained in April, below the 240,000 jobs expected by economists surveyed by Dow Jones. The unemployment rate edged up to 3.9%, versus 3.8% in the prior month, according to the Bureau of Labor Statistics. Wage figures were also less than expected in encouraging sign for inflation.

“The softer than expected payroll report suggests there is no heat in the economy that should keep inflation persistently high, which increases odds for rate cuts this year,” said Sonu Varghese, global macro strategist at Carson Group.

Rates dropped following the weak jobs report with the 10-year yield falling below 4.5%. Following Wednesday’s Federal Reserve’s meeting on Wednesday, Chair Jerome Powell said the central bank was prepared to act if unemployment rate ticked higher.

“We’re also prepared to respond to an unexpected weakening in the labor market,” Powell said.

Heading into Friday, the S&P 500 was off by 0.7% week to date, while the Nasdaq was down nearly 0.6%. The Dow is down 0.04% for the period. Friday’s gains could turn the major averages positive for the week.

Elsewhere, Apple advanced more than 6% after it announced a $110 billion share repurchase and a top -and bottom-line beat. Biotech Amgen surged 14% after posting better-than-expected earnings.

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