Updates to U.S. market open

By Stephen Culp

NEW YORK, July 2 (Reuters) - U.S. stocks followed their European counterparts higher on Thursday, and the dollar dipped after a softer-than-expected June employment report eased the likelihood of a rate hike from the U.S. Federal Reserve by the end of the year.

All three major U.S. indexes advanced and gold surged following the hotly anticipated report.

The U.S. economy added 57,000 jobs last month, or 48.2% shy of consensus. The number marked a 55.8% slowdown from May, which was revised sharply downward, to 129,000 from 172,000. However, the unemployment rate unexpectedly dipped to 4.2%, edging closer to the full employment side of the central bank's mandate.

"This was a little bit cooler than the market expected ... but with the unemployment rate dropping to 4.2% and yearly hourly wages at 3.5%, this could be considered a Goldilocks report," said Peter Cardillo, chief market economist at Spartan Capital Securities, in New York.

“(A rate hike) is still on the table," Cardillo added. "The market seems to be betting for at least one rate hike, probably in the last quarter of the year.”

On Wednesday, Federal Reserve Chair Kevin Warsh reiterated the central bank's average annual 2% inflation goal, but said that risks associated with war-related price pressures have come down.

On the geopolitical front, a round of indirect U.S.-Iran talks, focused on the crucial Strait of Hormuz, concluded with no sign that the negotiators made any headway toward lasting peace. Meanwhile, Russia launched hundreds of drones and dozens of missiles at Ukraine's capital Kyiv, ripping into several residential buildings and killing at least 18 people.

The Dow Jones Industrial Average .DJI rose 477.33 points, or 0.92%, to 52,786.09, the S&P 500 .SPX rose 49.89 points, or 0.65%, to 7,531.95 and the Nasdaq Composite .IXIC rose 141.19 points, or 0.53%, to 26,177.28.

European shares advanced as strength in defensive stocks offset tech weakness, and gained momentum after the U.S. jobs data release.

MSCI's gauge of stocks across the globe .MIWD00000PUS rose 6.42 points, or 0.57%, to 1,124.28.

The pan-European STOXX 600 .STOXX index rose 1.6%, while Europe's broad FTSEurofirst 300 index .FTEU3 rose 41.08 points, or 1.60%.

Emerging market stocks .MSCIEF fell 31.97 points, or 1.86%, to 1,689.96.

The dollar slid after the soft employment report, while the Japanese yen surged as traders girded themselves for a potential intervention by Japanese authorities.

The dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.73% to 100.66, with the euro EUR= up 0.69% at $1.1455.

Against the Japanese yen JPY=, the dollar weakened 1.03% to 160.88.

In cryptocurrencies, bitcoin BTC= gained 2.92% to $61,831.86. Ethereum ETH= rose 5.84% to $1,710.85.

The yield on benchmark U.S. 10-year notes US10YT=RR rose 0.42 basis points to 4.479%, from 4.475% late on Wednesday.

The 30-year bond US30YT=RR yield rose 1.14 basis points to 4.9774% from 4.966% late on Wednesday.

The 2-year note US2YT=RR yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 2.69 basis points to 4.137%, from 4.164% late on Wednesday.

Oil prices dipped to a four-month low as supply concerns eased following the conclusion of the U.S.-Iran talks in Doha.

U.S. crude CLc1 fell 1.28% to $67.70 a barrel and Brent LCOc1 fell to $70.81 per barrel, down 1.08% on the day.

Gold jumped after the weak payrolls report reduced the probability of Fed tightening this year. Spot gold XAU= rose 2.45% to $4,128.69 an ounce. U.S. gold futures GCc1 rose 1.74% to $4,139.20 an ounce.