NEW YORK — The Dow Jones Industrial Average rose modestly in early trading on Friday as investors digested a weaker-than-expected July employment report that showed the U.S. economy unexpectedly shed jobs, potentially giving the Federal Reserve more room to pause or adjust its interest-rate path.

At 9:39 a.m. EDT, the blue-chip index stood at 53,977.26, up 92.16 points or 0.17 percent. The move followed a session on Thursday in which the Dow fell 464 points, or 0.85 percent, to close at 53,885.10, ending a five-day winning streak. Broader markets also turned higher after the labor data, with the S&P 500 and Nasdaq Composite posting gains as traders recalibrated expectations around monetary policy.

The Labor Department reported that nonfarm payrolls declined by 23,000 in July, well below economists' forecasts of an 80,000-job increase. The unemployment rate edged down to 4.1 percent. The soft reading contrasted with recent months of relatively steady hiring and arrived at a moment when markets have been closely monitoring inflation pressures, corporate earnings and geopolitical developments for clues on the Fed's next steps.

The Dow has remained near record territory in recent sessions after climbing to highs above 54,700 earlier in the week. Over the past five trading days leading into Friday, the index had posted solid gains, supported by strong corporate results and intermittent........

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