By Laurent Delevingne

BOSTON (Reuters) – A positive jobs report pushed up Wall Street shares slightly and spurred Treasury yields to rise on Friday, but investor optimism was tempered by worries about inflation and the impact of the Delta coronavirus variant on the economy.

The non-farm payroll rose by 943,000 in July after rising to 938,000 in June, the Labor Department said in its closely watched employment report, lowering unemployment to 5.4% and suggesting that the The economy has maintained its strong momentum. Economists polled by Reuters predicted an increase in the wage bill of 870,000 jobs.

“This is a number on which it is difficult to say anything other than positive things,” said Sameer Samana, market strategist at Wells fargo (NYSE 🙂 Investment Institute in St. Louis said. “Especially with the Delta variant getting better, it would be much more confident for the market to have a very strong economy.”

However, stock market gains have been dampened. The index rose 157.71 points, or 0.45%, to 35,221.96, gained 8.66 points, or 0.20%, to 4,437.76, and lost it 63 .06 points, or 0.42%, to 14,832.06.

Peter Cardillo, economist at Spartan Capital Securities in New York, said that although the number of jobs is “solid”, this indicates that “inflation has more resilience and is not necessarily temporary”.

US Treasury yields rose after the jobs report aligned with targets the Federal Reserve set to begin loosening stimulus.

Benchmark 10-year Treasury yields hit 1.2902%, approaching a week high after their US close at 1.217% on Thursday. Yields have been below 2.0% since July 2019.

“The strength of the hiring calls into question the rally in Treasuries that has taken place in recent months,” Mike Bell, market strategist at JP Morgan Asset Management, said in an email. “We expect this to be the start of a sustained rise in Treasury yields for the rest of the year.”

Investors will now focus on when and how quickly the Federal Reserve could reduce its support for the economy. Policymakers have suggested this week that an interest rate hike could come in late 2022 or 2023. The Fed’s annual meeting of central bankers in Jackson Hole, Wyoming, later this month, is seen as offering clues to the Fed’s thinking.

Oil prices fell further on Friday, recording their biggest weekly loss since October after drops earlier in the week triggered by rising COVID-19 cases and a surprise increase in inventories.

US crude fell 0.74% to $ 68.58 a barrel, and was at $ 70.97, down 0.45% on the day.

The dollar’s value against other currencies rose on Friday, as the jobs report supported arguments for a faster tightening of US policy. The latter was up about 0.521, or 0.565%, by early afternoon.

The stronger dollar and the potential for higher yields hurt gold. Spot prices fell 2.2% to $ 1,763.60 an ounce, and the United States fell 2.48% to $ 1,760.00 an ounce.

was up about 5.3% to $ 43,061, its highest price since May. Ether, the world’s second largest cryptocurrency, hit around $ 2,900, a 3.3% gain, a day after a major software upgrade to its underlying blockchain.