US STOCKS-Wall St set to open higher as jobs data dampens rate hike odds, yields fall

By Johann M Cherian and Tharuniyaa Lakshmi

Oct 2 (Reuters) - Wall Street's main indexes were set to open higher on Friday as a softer-than-expected jobs report deepened prospects of an unchanged US rate this month, leading to a bigger drop in Treasury yields, while lower oil prices also boosted sentiment.

Nonfarm payrolls increased by 29,000 jobs last month after a downwardly revised 133,000 rise in August, the Labor Department's closely watched employment report showed on Friday. Economists polled by Reuters had forecast payrolls advancing 90,000.

"The lower jobs print, including the revision, is, oddly enough, good news for stocks. With the bond market organically doing the job of the Fed recently, we needed to sacrifice a headline metric and this morning's report accomplished the goal," said Todd Schoenberger, chief investment officer at CrossCheck Management.

A string of data showing resilient economic activity and a slower-than-expected increase in prices, along with comments from at least two top policymakers pushing back against another rate increase, have led investors to increasingly bet that the central bank will keep rates on hold this month.

Traders now assign a 16% probability that the Federal Reserve would hike rates by 25 basis points in October, compared with 26% before the report.

Wall Street's main indexes finished higher on Thursday after a rebound in US Treasuries eased concerns over soaring yields, following a bond selloff that had pushed the benchmark 10-year yield to multi-decade highs earlier in the day.

Still, the S&P 500 .SPX was set for a weekly loss of about 1%, having come under pressure as rising yields raised worries about inflation and mounting government debt.

The yield on the two-year Treasury note , which is closely tied to interest-rate expectations, retreated for the second straight day.

Adding to the positive sentiment, Brent crude prices slipped below $100 a barrel after a report that the European Union discussed additional diesel and crude stock releases, even though there were no new updates on the resolution to the Middle East conflict.

At 08:47 a.m. ET, Dow E-minis were up 424 points, or 0.83%, and S&P 500 E-minis were up 62.75 points, or 0.81%. Nasdaq 100 E-minis were up 349 points, or 1.13%.

Chips and megacaps led the gains. Nvidia NVDA.O added 2.2% in premarket trading, while Broadcom AVGO.O and Advanced Micro Devices AMD.O rose about 1.7% and 2.5%, respectively. Amazon AMZN.O and Tesla TSLA.O were up nearly 1% each.

Nike NKE.N fell 10.4% after the US sportswear company forecast a surprise steep drop in annual revenue due to weakness in China, announced job cuts and decided to shake up its global business divisions.

Friday will also bring August data on factory orders along with comments by Dallas Fed President Lorie Logan.

Among other equities, credit-scoring company Fair Isaac FICO.N fell 7.5% after Bloomberg News reported that the US Federal Housing Finance Agency plans to ease mortgage credit data requirements for Fannie Mae FNMA.PK and Freddie Mac FMCC.PK.

Reflecting the broader risk-on sentiment, bitcoin gained 3.4%, while Coinbase COIN.O and Strategy MSTR.O rose nearly 3.1% each.