New York, Jul 7 (AP) Wall Street is holding relatively steady Friday after data suggested the US job market is still warm enough to keep the economy growing but maybe not so hot that it stokes inflation much higher.

The S&P 500 was little changed in late morning trading. The Dow Jones Industrial Average was down 61 points, or 0.2 per cent, at 33,860, as of 11:20 a.m. Eastern time, and the Nasdaq composite was 0.2 per cent higher.

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A lot is riding on whether the economy can navigate the narrow pathway to avoid a long-predicted recession. It needs to keep growing despite much higher interest rates instituted by the Federal Reserve to bring down inflation. But it can't grow so quickly that the Fed feels pressure to brake much harder on the economy to prevent inflation from spiraling higher.

Friday's report showed US employers added 209,000 jobs last month, a slowdown from May's hiring of 306,000. Perhaps more importantly, it wasn't far off economists' expectations.

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That's unlike a report from Thursday, which sent stocks dropping after it suggested US hiring could be much stronger than expected.

Besides the slowdown in overall hiring, some numbers underneath the report's surface also showed some loosening in the job market. More people are working part-time because their hours have been cut, for example, said Brian Jacobsen, chief economist at Annex Wealth Management.

“The job market is healthy, for now, but it's not red hot,” he said.

That could keep the Federal Reserve on the course it's been hinting at recently: perhaps two more increases this year before the Fed holds rates at a high level to ensure inflation returns to its 2 per cent target. The wide assumption on Wall Street is the Fed will hike rates in three weeks at its next meeting.

Treasury yields were mixed following the much anticipated jobs data. The 10-year Treasury yield rose to 4.04 per cent from 4.03 per cent late Thursday. It helps set rates for mortgages and other important loans.

The two-year yield, which moves more on expectations for the Fed, fell to 4.92 per cent from 5.00 per cent.

Some concerning signals for inflation were also still embedded in the report.

Wage growth held steady last month, instead of slowing as economists expected, for example. While workers would rather have the 4.4 per cent gain in average hourly earnings from a year earlier than the 4.2 per cent that was predicted, Wall Street's fear is the Fed will see too-strong wage growth as keeping upward pressure on inflation.

Yields are already around their highest levels since March, which was when high rates helped trigger three failures in the US banking system that rattled confidence across financial markets. High rates have also caused pain in other areas of the economy, from manufacturing to housing.

Bank stocks were rising Friday amid relief that the jobs report wasn't much stronger than expected, like Thursday's more limited payroll report was. JPMorgan Chase rose 1 per cent and was one of the strongest forces pushing upward on the S&P 500.

Smaller banks that have been under heavy scrutiny as Wall Street hunts for other potential weak links were also climbing. PacWest Bancorp gained 3 per cent.

Stocks of smaller companies also rose more than the rest of the market. Not only do investors see them as moving more closely with the strength of the US economy than big multinational companies, smaller stocks are also viewed as benefiting more from easier interest rates. The Russell 2000 index of smaller stocks rose 1.5 per cent.

On the losing side of Wall Street was Levi Strauss, which tumbled 7 per cent despite reporting slightly stronger profit for the latest quarter than analysts expected. It cut its forecasted range for earnings for the full year, as its US wholesale business remains under pressure.

Costco Wholesale fell 1.3 per cent after reporting its growth in sales slowed in June from May.

Higher yields are helping to pull the S&P 500 toward a loss of 0.8 per cent for the week. That would be just its second losing week in the last eight.

In stock markets abroad, indexes continued to sink in China, where a recovery in the world's second-largest economy is slower than hoped following the removal of anti-COVID restrictions. Hong Kong's Hang Seng fell 0.9 per cent, and stocks in Shanghai slipped 0.3 per cent.

US Treasury Secretary Janet Yellen was also in Beijing attempting to ease tensions between the world's two largest economies.

Yellen is meeting with senior Chinese officials to try to soothe antagonism and promote global financial stability. Speaking with business people, she criticized China's treatment of US companies and new export controls on metals used in semiconductors, while defending US controls on technology exports that irk Beijing, saying they're needed for national security.

In Europe, stocks were mixed. Germany's DAX returned 0.5 per cent, and the FTSE 100 in London fell 0.3 per cent. (AP)

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)