Wall Street closed higher on Friday, capping its strongest weekly performance since April following the release of a weaker-than-expected July jobs report. Bond markets rallied sharply in response to the disappointing employment data, with stock prices following suit as investors recalibrated their outlook for monetary policy. Bond prices move inversely to yields, meaning the drop in Treasury yields reflected a significant surge in demand for government debt as investors sought safer positioning. Equity markets took their cues from the bond rally, interpreting softer labor market conditions as a potential signal that interest rate pressure could ease in the months ahead. Traders and analysts will be watching consumer price index readings closely, as the combination of a weakening labor market and stubborn inflation could complicate the Fed’s path forward considerably.