NEW YORK — (AP) — Stocks are rising after an unexpectedly strong report on the job market helped ease worries on Wall Street about a possible recession. The S&P 500 was 0.9% higher early Friday and on pace for a third straight winning week. The Dow was up 270 points, or 0.8%, while the Nasdaq was 1.1% higher. The Labor Department reported that employers unexpectedly accelerated their hiring last month. More importantly for markets, increases for workers’ pay also slowed in May. Investors hope that could mean less upward pressure on inflation, which could allow the Federal Reserve to take it easier on raising interest rates.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

Wall Street pointed higher Friday ahead of a U.S. jobs market update, one day after U.S. lawmakers approved a deal to avert a government debt default.

Futures for the S&P 500 and the Dow Jones Industrial Average rose 0.5% before the bell.

Late Thursday, the Senate gave final approval to an agreement to raise the amount the government can borrow in exchange for spending cuts.

The widely expected step removed the threat of default that roiled markets last week before President Joe Biden and House Speaker Kevin McCarthy negotiated a compromise.

While the U.S. debt agreement was positive for the markets, investors are more concerned about whether the economy will fall into a recession before inflation recedes enough to convince the Federal Reserve to ease off rate hikes.

A report Thursday showed fewer workers applied for unemployment benefits last week than expected, while another suggested employers increased their payrolls last month by more than forecast.

That’s good news for workers and the overall economy, but the Fed worries a strong job market could also keep pressure up on inflation.

Wall Street’s benchmark S&P 500 index rallied 1% on Thursday after data showed manufacturing and retail activity weakening. That added to hopes the Fed might decide upward pressure on prices is easing and more rate hikes can be postponed or scaled down.

“Skipping a rate hike” at this month’s Fed meeting would let policymakers “see more data before making decisions,” said a board member, Philip Jefferson. The president of the Federal Reserve Bank of Philadelphia, Patrick Harker, made similar comments.

Following those reports, traders were largely betting on the Fed to hold rates steady, though Jefferson also said that wouldn’t necessarily mean the end to hikes.

The statements “reignited the prospect of skipping a hike” after strong jobs data last week fed fears of more increases, said James Knightley of ING in a report.

However, if U.S. government data Friday show the job market still is strong, that “could easily swing things back in favor of a hike,” Knightley said.

At midday in Europe, the FTSE 100 in London was up 1%, the CAC 40 in Paris advanced 1.2% and the DAX in Frankfurt rose 1.1%.

In Asia, the Shanghai Composite Index gained 0.8% to 3,230.06 and the Nikkei 225 in Tokyo added 1.2% to 31,524.22. The Hang Seng in Hong Kong jumped 4% to 18,949.94.

The Kospi in Seoul rose 1.2% to 2,601.36 and the S&P ASX 200 in Sydney was 0.5% higher at 7,145.10.

India’s Sensex gained 0.2% to 62,521.46. New Zealand declined while Bangkok advanced. Markets in Singapore and Indonesia were closed for holidays.

In the energy market, benchmark U.S. crude rose $1.20 to $71.29 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $2.01 on Thursday to $70.10. Brent crude, the price basis for international oil trading, advanced $1.18 to $75.46 per barrel in London. It gained $1.68 the previous session to $74.28.

The dollar gained to 138.94 yen from Thursday’s 138.86 yen. The euro edged down to $1.0760 from $1.0762.

On Thursday, the Dow gained 0.5% and the Nasdaq composite jumped 1.3%.

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McDonald reported from Beijing; Ott reported from Silver Spring, Md.

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