By Shashwat Chauhan and Johann M Cherian
Aug 7 (Reuters) - Wall Street's main indexes were on track for strong weekly gains on Friday after data showed the U.S. economy unexpectedly shed jobs last month,
tempering speculation of the Federal Reserve raising borrowing costs in September.
A Labor Department report showed nonfarm payrolls fell 23,000 in July, far below the 80,000 job additions that economists polled by Reuters had expected.
"For the Fed, the report could keep policymakers on track to hike (rates); however, there may be somewhat less urgency, in our view, with the timing likely dependent on incoming inflation and employment data over the months ahead," said Brian Therien, senior analyst at Edward Jones.
Money market data showed traders pared back expectations for an increase in borrowing costs in September, with odds of a hike now at about 20%, from 55% before the report, according to data compiled by LSEG.
Under new Chair Kevin Warsh, the U.S. central bank has offered investors little forward guidance on monetary policy, sharpening the focus on economic data and commentary from policymakers.
Payrolls, however, have a tendency to be softer in July, and economists view the labor market as being in "slow hire, slow fire" mode.
At 11:36 a.m. ET, the Dow Jones Industrial Average rose 91.87 points, or 0.17%, to 53,976.97, the S&P 500 gained 48.02 points, or 0.62%, to 7,757.98, and the Nasdaq Composite was up 343.47 points, or 1.30%, to 26,691.82.
All three main indexes were headed for their best weekly showing since April, as robust earnings from several sectors have propelled U.S. stocks higher lately.
A strong show from AI-related companies has quelled some concerns about elevated AI spending not yielding conclusive results, pushing the Dow and the S&P 500 to fresh record highs, while helping the Nasdaq recover from a pullback that briefly pushed it nearly 10% below its previous peak.
On Friday, eight of the 11 S&P sectors were trading higher, with consumer discretionary leading gains while energy lagged.
Elon Musk's SpaceX surged 10.6% a day after the expiry of the first of several share lockup restrictions following its record public offering in June.
Collaboration software maker Atlassian jumped 30.2% while chip company Microchip Tech advanced 13.8% after both forecast quarterly revenue above estimates.
The S&P 500 software and services index rose 1.5% as software stocks found sure footing. Cybersecurity company Cloudflare also gained 7.3% after raising its full-year revenue forecast above estimates.
Chip stocks, which have seen immense volatility in the last few months, were 2.3% higher. Heavyweight Nvidia climbed 2.6%.
Within the space, memory-linked companies were again under pressure after Thursday's weakness. Sandisk, Western Digital, Micron Technology and U.S.-listed shares of SK Hynix were all lower.
Of the more than 400 companies on the S&P 500 that have reported earnings so far this quarter, more than 85% have beaten analysts' expectations, above the 68% beat rate seen in a typical quarter since 1994, according to LSEG I/B/E/S data.
Among other movers, vacation rental company Airbnb rose 15.4% after beating second-quarter revenue estimates, while Trade Desk dropped 21.7% after the ad-tech firm forecast third-quarter revenue below expectations.
(Reporting by Johann M Cherian and Shashwat Chauhan in Bengaluru; Additional reporting by Niket Nishant; Editing by Devika Syamnath and Pooja Desai)
