NEW YORK (CNNMoney.com) - The market outlook turned decidedly positive Friday after a much weaker-than-expected jobs report heightened speculation that the Federal Reserve will have to back off its interest rate hiking campaign.

U.S. stock futures rose after the report showed that employers added only 75,000 new workers to their payrolls in May, compared with the 175,000 that economists had expected.

The report also showed a drop in unemployment, to 4.6 percent, the lowest rate in five years and slightly lower than economists' expectations. Average hourly wages rose only 0.1 percent after a 0.5 percent rise in April, which had stirred some inflation fears. Economists had forecast only a 0.3 percent gain in May. (For more on the jobs report, click here.)

Some economists said the gain in payrolls, generally the most closely watched number, would take a back seat in the eyes of investors this month to the unemployment rate or hourly wages components of the report.

"This market is frantic about any rumblings about inflation," said Anthony Chan, chief economist for JPMorgan Private Client Services. "I think the average hourly earnings number and the hours worked will be the things that captures the market initially."

Meanwhile, oil prices were higher after disruptions at two Texas refinery, as traders also watched the progress of negotiations over the Iranian nuclear program.

The June light crude futures contract for NYMEX was up 56 cents to $70.90 in electronic trading, while the July contract for Brent crude gained 43 cents to $69.82.

Major markets in Asia closed mostly higher Friday, while major European markets were up in early trading ahead of the U.S. jobs report. NYSE Group (Research) reached agreement late Thursday to buy Paris-based Euronext, for about just under $10 billion, putting it ahead in the race to create the first trans-Atlantic stock exchange.

Treasury prices were gained on the jobs report, trimming the yield on the benchmark 10-year note to 5.05 percent from the 5.10 percent level reached late Thursday. The dollar was higher against the yen but lower against the euro.

Besides the jobs report, Friday will also bring an 8:30 a.m. ET report on April factory orders. Economists forecast a 2.1 percent, following a 4.2 percent rise in March.

In corporate news, the Wall Street Journal reported Friday a breakdown in talks between Microsoft (Research) and Adobe (Research) about Microsoft plan to use the Adobe-developed electronic document software, called PDF, in Microsoft's Office software package. A Microsoft attorney told the paper it now expects an anti-trust lawsuit from Adobe.

No. 1 retailer Wal-Mart Stores (Research) has its shareholders meeting starting at 9:15 a.m. Tuesday.

For a more detailed look at the markets before the open, click here.