US STOCKS-Wall Street rallies on rate cut hopes, trade optimism

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* Weak U.S. employment report casts pall over economy
* Traders boost bets on Fed rate cuts
* U.S. gives Chinese exporters more time before higher
tariffs
* Tech sector provides biggest boost
* Indexes up: Dow 1.12%, S&P 1.20%, Nasdaq 1.73%

(Updates prices to early afternoon)
By Amy Caren Daniel
June 7 (Reuters) - Wall Street's main indexes rose about 1%
on Friday, as a sharp slowdown in U.S. job growth raised hopes
of an interest rate cut, with Washington's decision to delay
tariffs on Chinese goods adding to the upbeat mood.
The S&P 500 .SPX is up about 4.5% this week, putting it on
pace for its biggest 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. "It was a goldilocks number. The number was weaker than
expected and we are one step closer to the Fed cutting rates
before the end of the year," said Larry Adam, chief investment
officer at Raymond James in Baltimore, Maryland.
"An interest rate cut is being priced into the market, but
in order to go higher you do need to get progress on the trade
front because in the longer term that is the bigger issue for
markets."
Following the weak 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. MMT/
Interest-rate sensitive bank stocks .SPXBK dropped 0.86%,
while the broader financial sector .SPSY dipped 0.06% and was
the only major S&P sector trading lower.
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 fact that they are talking and the tariffs don't go
into effect immediately is being seen as progress on trade,"
Adam said.
Tariff-sensitive Boeing Co BA.N and Caterpillar Inc
CAT.N rose about 1%, while industrial stocks .SPLRCI gained
1.03%.
At 12:28 p.m. ET the Dow Jones Industrial Average .DJI was
up 287.13 points, or 1.12%, at 26,007.79. The S&P 500 .SPX was
up 34.23 points, or 1.20%, at 2,877.72 and the Nasdaq Composite
.IXIC was up 132.02 points, or 1.73%, at 7,747.57.
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. Technology stocks, among the hardest hit due to the recent
escalation in trade tensions, rose 2.10% and provided the
biggest boost.
The sector was lifted by gains in Apple Inc AAPL.O ,
Microsoft Corp MSFT.O and chipmakers, which get a major
portion of their revenue from China. The Philadelphia chip index
.SOX rose 1.13%.
Beyond Meat Inc BYND.O shares surged 36.7% after the maker
of plant-based burgers said it expects to more than double its
revenue and report breakeven EBITDA this year. Advancing issues outnumbered decliners by a 3.59-to-1 ratio
on the NYSE and by a 2.09-to-1 ratio on the Nasdaq.
The S&P index recorded 110 new 52-week highs and no new low,
while the Nasdaq recorded 93 new highs and 79 new lows.