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* Weak U.S. employment report casts pall over economy
* Traders boost bets on Fed rate cuts, starting in July
* U.S. gives Chinese exporters more time before higher tariffs
* Indexes up: Dow 1.31%, S&P 1.37%, Nasdaq 1.84% (Adds comment, adds details)
By Amy Caren Daniel and Sruthi Shankar
June 7 (Reuters) - Wall Street’s main indexes rose 1% on Friday, as a sharp slowdown in May domestic job growth raised hopes of an interest rate cut, while Washington’s decision to delay tariffs on Chinese goods added to the upbeat mood.
The S&P 500 is up 4.8% this week, putting it on pace for its best weekly gain since November, on rising expectations that the Fed would turn more accommodative to blunt the impact of escalating trade tensions.
A Labor Department report showed nonfarm payrolls increased by 75,000 jobs last month, much smaller than the 185,000 additions estimated by economists in a Reuters poll, suggesting the loss of momentum in economic activity was spreading to the labor market.
“We’ve seen a bit of slowing in jobs growth which will embolden those in the rate cut camp,” said Michael Antonelli, market strategist at Robert W. Baird in Milwaukee.
Following the week jobs data, traders raised their bets that the Federal Reserve will start cutting rates in July followed by two more rate cuts before the end of the year.
Interest-rate sensitive bank stocks fell 0.40%, but the broader financial sector reversed course to trade marginally higher.
Also helping sentiment, the United States officially granted Chinese exporters two more weeks to get their products into the country before increasing tariffs, according to a U.S. government notice posted online.
“The market is just so sensitive to trade right now that anything that looks positive will have an upsized reaction,” Antonelli said.
Tariff-sensitive Boeing Co and Caterpillar Inc rose about 1%, while industrial stocks gained 1.2%.
At 10:58 a.m. ET, the Dow Jones Industrial Average was up 336.05 points, or 1.31%, at 26,056.71. The S&P 500 was up 38.85 points, or 1.37%, at 2,882.34 and the Nasdaq Composite was up 139.87 points, or 1.84%, at 7,755.42.
On the tussle with Mexico, a senior White House official said if talks continue to go well President Donald Trump could decide not to move forward with tariffs on Mexican imports on Monday.
All the major S&P sectors were trading higher and the technology sector, among the hardest hit due to the recent escalation in trade tensions, rose 2.3% and provided the biggest boost.
Beyond Meat Inc shares surged 32.5% after the maker of plant-based burgers and sausages said it expects to more than double its revenue and report breakeven EBITDA this year.
Advancing issues outnumbered decliners by a 5.23-to-1 ratio on the NYSE and by a 2.72-to-1 ratio on the Nasdaq.
The S&P index recorded 107 new 52-week highs and no new low, while the Nasdaq recorded 84 new highs and 59 new lows. (Reporting by Amy Caren Daniel and Sruthi Shankar in Bengaluru; Additional reporting by Shreyashi Sanyal; Editing by Sriraj Kalluvila)