US stocks rallied on Friday after data showed slower jobs and wage growth, signaling that the labour market is cooling -- and reducing expectations of further interest rate hikes.

The Dow Jones Industrial Average climbed 0.7 percent to finish at 34,061.

The S&P 500 advanced 0.9 percent to 4,358, while the Nasdaq Composite Index rose 1.4 percent to 13,478.

The employment report released by the Labor Department on Friday showed that hiring weakened to 150,000 new jobs in October, while monthly wage growth ticked down to 0.2 percent.

"We have been seeing the labor market cooling slightly, but just not nearly enough until now, and this could be a sign of that accelerating," said Craig Erlam, of the OANDA trading platform.

"The Federal Reserve could not realistically have hoped for a better jobs report," he added.

The Fed decided on Wednesday to keep interest rates unchanged, which markets saw as a sign that the central bank is done with rate hikes for now.

But the central bank will likely need to see several positive reports before it can declare victory in its inflation fight, Erlam said.

Other economic indicators appear encouraging as well, with services sector activity slowing in October, according to a survey.

Meanwhile, two-year Treasury yields fell to around 4.8 percent.

"That reflects the market changing its expectations about the path of rate cuts," said Steve Sosnick, of Interactive Brokers.

"They are fully pricing in a rate cut by June," he said.

Among individual companies, Apple shares slumped 0.5 percent after reporting that sales fell for a fourth consecutive quarter year-on-year. (AFP)