The Dow Jones Industrial Average closed at an all-time high on Friday, reassuring investors who were worried the economy would be too weak after a better-than-expected jobs report.
The Dow Jones Industrial Average rose 341.16 points, or 0.8%, to 42,352.75, above Monday's all-time high of 42,330.15.
The S&P 500 rose 0.9% and the Nasdaq rose more than 200 points, or 1.2%. All three indexes ended this week in positive territory.
According to the report, U.S. payrolls growth in September was the largest in six months, and the unemployment rate fell to 4.1%.
Traders further pared back bets on a 50 basis point (bp) rate cut by the Federal Reserve on November 6-7. Traders are currently pricing in just an 8% chance of a 50bps rate cut, down from about 31% early Friday. CME Group's FedWatch tool showed this.
Peter Cardillo, chief market economist at Spartan Capital Securities in New York, said the data “basically indicates that economic activity in the fourth quarter is likely to continue at a solid pace.” ” he said.
“This is a nice surprise, but I also think the pace of rate cuts could slow down.”
The Fed began its monetary easing cycle last month by cutting interest rates by 50 basis points.
Small-cap stocks outperformed, with the Russell 2000 index up 1.4% and the S&P 500 Financials index up 1.6%.
The S&P Energy Index rose more than 1% on the day as oil prices rose.
The index has risen 6.8% so far this week, the biggest weekly gain since October 2022, amid rising tensions in the Middle East.
Ports on the U.S. East Coast and Gulf Coast have reopened, but it will take time to clear the backlog of cargo.
Among other stocks, Spirit Airlines fell 275% on reports that it was in talks with bondholders about potentially filing for bankruptcy.
Rivian shares fell 3.1% after the electric vehicle startup cut its full-year production forecast and delivered fewer vehicles than expected in the third quarter.
Third-quarter earnings reports for S&P 500 companies are scheduled to begin unofficially next week.
