The S&P 500 closed at a record high on Friday, gaining 46.48 points, or 0.60%, to 7756.44, after data showing an unexpected loss of jobs in the U.S. economy reduced expectations for an interest-rate hike at the Federal Reserve's September meeting.
Jobs data reduce rate-hike expectations
The U.S. Labor Department said nonfarm payrolls fell by 23,000 last month, far below the 80,000 increase economists polled by Reuters had expected.
Employment data for the previous two months were revised to show sharp declines, while the unemployment rate fell to 4.1% last month from 4.2% in June as workers left the labor force.
The CME Group's FedWatch tool showed market expectations for the Federal Reserve to raise interest rates at its next meeting falling to about 44%, from 55% in the previous session and 67% a week earlier.
Oil prices and yields fall
Oil prices fell after signs of progress toward a potential peace agreement in the Iran war, sending Treasury yields lower and easing inflation concerns that could prompt the Federal Reserve to raise interest rates.
Earnings support indexes
A strong earnings season helped ease concerns about heavy spending by companies tied to artificial intelligence and pushed the three major indexes to their biggest weekly percentage gains since mid-April.
Interest rates may need to be cut somewhat to stimulate job growth, but cutting rates will also fuel inflation. So we are in something of a bind at this stage. Nevertheless, the market surged because earnings were excellent.
Preliminary data showed the Nasdaq Composite rising 338.81 points, or 1.29%, to 26690.62, while the Dow Jones Industrial Average gained 151.33 points, or 0.28%, to 54036.43.
