* Major U.S. stock indexes up more than 1%
* S&P 500 on track for biggest weekly pct gain since Nov
* Dollar drops following Labor Department report
* Oil prices rise
By Caroline Valetkevitch
NEW YORK, June 7 (Reuters) - Major world stock indexes jumped and U.S. Treasury yields tumbled on Friday after a slowdown in U.S. job growth fueled hopes of a U.S. interest rate cut, while Washington's move to delay tariffs on Chinese goods added to equity market optimism.
The U.S. dollar index also dropped and gold prices rallied to their highest levels since April 2018 following the U.S. Labor Department's monthly report, which also showed wages rose less than expected in May. Yields on 10-year Treasury notes hit their lowest since September 2017.
The jobs data suggested the loss of momentum in economic activity was spreading to the labor market, which could put pressure on the Federal Reserve to cut rates this year.
On Wall Street, the benchmark S&P 500 index was more than 1% higher in afternoon trading and on track for its biggest weekly percentage gain since November 2018.
"This is the type of read the doves will really take to, as it supports the argument for cutting rates beyond politics or trade issues, which were never part of the Fed's mandate to begin with," said Mike Loewengart, vice-president of investment strategy at E*Trade Financial in New York.
Hopes that the Fed would turn more accommodative to blunt the impact of escalating trade tensions have helped support stocks in recent days. U.S. government on Friday said it was granting Chinese exporters two more weeks to get their products into the United States before increasing tariffs on those items. Also, U.S. President Donald Trump said there was a "good chance" the United States would make a trade deal with Mexico. Dow Jones Industrial Average .DJI rose 290.73 points, or 1.13%, to 26,011.39, the S&P 500 .SPX gained 34.65 points, or 1.22%, to 2,878.14 and the Nasdaq Composite .IXIC added 135.72 points, or 1.78%, to 7,751.27.
The pan-European STOXX 600 index .STOXX rose 0.93% and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 1.10%.
In U.S. Treasuries, benchmark 10-year notes US10YT=RR last rose 12/32 in price to yield 2.0827%. The yield touched 2.053% shortly after the May payrolls report, which was its lowest since September 2017. trade tensions between the United States and its trading partners still brewing, investors have been assessing how global central banks will respond to signs of a downturn.
Traders now are betting on multiple rate cuts by the Fed over the next 12 months.
But a cut is not guaranteed. And the potential for central banks to disappoint markets was highlighted on Thursday, when the European Central Bank declined to hint it would cut rates soon. dollar index .DXY fell 0.51%, with the euro EUR= up 0.56% to $1.1337.
In the oil market, crude prices gained amid signs that OPEC and other producers could extend their output reduction deal. prices jumped to their highest levels since April 2018 as the jobs report sent the dollar lower. Spot gold XAU= was 0.6% higher to $1,343.07 per ounce, having earlier hit its intra-day high of $1,348.08. crude CLcv1 rose 1.81% to $53.54 per barrel.
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