The Dow Jones Industrial Average rose by about 406 points, or 0.8%, during morning trading. Caterpillar's stock price increased by about 3.7%, and NVIDIA's rose by about 2.8%. These two stocks contributed approximately 219 points to the Dow's increase.

This rebound is related to the employment report for September that was previously released. The report showed that the U.S. economy only added 29,000 new jobs that month, far below the approximately 90,000 jobs that economists were expecting. The unemployment rate also rose slightly to 4.2%, and the total number of non-farm jobs in July and August was revised downward by 60,000.

NVIDIA benefits from the decline in U.S. Treasury yields

Weaker labor market data pushed the yield on 10-year U.S. Treasury bonds down to around 5.17%, and the yield on 2-year bonds down to around 4.72%, alleviating the pressure on high-valued growth stocks.

This is particularly important for NVIDIA. Higher yields will reduce the present value of future profits and may make bonds more attractive compared to expensive tech stocks; this follows the same logic as when rising U.S. Treasury yields put pressure on NVIDIA and other artificial intelligence concept stocks.

NVIDIA's rise also helped the Nasdaq index to approach record highs, reaching around 27,309 points at one point during the session, surpassing the previous closing record.

Caterpillar provides periodic support

Caterpillar provided another form of support.

This industrial stock has risen by more than $30, making its impact particularly significant in the Dow Jones Industrial Average, which is calculated based on price weighting. Since each $1 increase in a Dow component stock typically causes the index to move about 5.94 points, Caterpillar alone has had a disproportionate effect on the benchmark index.

This trend also shows that the rebound on Friday was not limited to tech stocks. The weak employment report alleviated market concerns about interest rate hikes, while lower oil prices and a more calm bond market also supported industrial and cyclical stocks.

This is almost the opposite of the market reaction following the release of the employment report in August. At that time, stronger employment growth pushed up U.S. Treasury yields and put pressure on the Dow Jones index.