U.S. stocks ended higher on Friday, with the S&P 500 reaching a record closing level after unexpectedly weak U.S. jobs data reduced expectations for another Federal Reserve rate hike in September.
_x000D_The Labor Department reported that nonfarm payrolls fell by 23,000 last month. Economists surveyed by Reuters had expected an increase of about 80,000 jobs.
_x000D_The report also showed significant downward revisions to employment gains recorded during the previous two months. The unemployment rate fell slightly to 4.1% from 4.2%, partly because some workers left the labor force.
_x000D_ _x000D_Fed Rate Hike Expectations Fall
_x000D_The weaker employment figures quickly changed expectations for Federal Reserve policy.
_x000D_According to CME FedWatch, market expectations for a September rate hike fell to about 44%, compared with 55% in the previous session and 67% a week earlier.
_x000D_Investors have been closely watching economic data as the Federal Reserve provides limited forward guidance on monetary policy under new Fed Chair Kevin Warsh.
_x000D_The latest jobs figures strengthened expectations that policymakers could face pressure to support the labor market.
_x000D_ _x000D_S&P 500 Reaches Record Close
_x000D_The major U.S. stock indexes all finished higher.
_x000D_The Dow Jones Industrial Average gained 151.83 points, or 0.28%, to close at 54,036.93.
_x000D_The S&P 500 advanced 47.68 points, or 0.62%, to 7,757.64, marking a record closing high.
_x000D_The Nasdaq Composite climbed 342.26 points, or 1.30%, to 26,690.62.
_x000D_The gains capped a strong week for U.S. stocks. The S&P 500 rose 3.58% for the week, while the Nasdaq gained 5.19%. The Dow advanced 2.96%.
_x000D_ _x000D_Earnings Give Markets Another Boost
_x000D_Strong corporate earnings also helped support the rally.
_x000D_Of the 436 companies in the S&P 500 that had reported results through Friday morning, 85.1% had exceeded analyst expectations, according to LSEG data.
_x000D_That figure is well above the long-term average of 68% since 1994.
_x000D_Investors have also become less concerned about the huge spending by artificial intelligence companies as corporate earnings continue to show strength.
_x000D_Tom Siomades, chief market economist at AE Wealth Management, said the market faces a difficult economic balance between supporting employment and controlling inflation.
_x000D_He noted that lower interest rates could encourage job growth but could also increase inflationary pressure.
_x000D_ _x000D_Oil Prices Ease as Iran Peace Prospects Grow
_x000D_Signs of progress toward a potential peace agreement in the Iran war have also influenced markets.
_x000D_Oil prices have cooled, helping ease concerns about inflation. Lower energy prices could reduce pressure on the Federal Reserve to keep interest rates higher.
_x000D_The combination of weaker employment data, lower oil prices and strong corporate earnings helped push Treasury yields lower and supported the stock market.
_x000D_ _x000D_SpaceX, Atlassian and Airbnb Among Biggest Movers
_x000D_Several companies posted major gains during Friday’s session.
_x000D_SpaceX surged 15.8% after the expiration of the first of several share lockup restrictions following its record public offering in June.
_x000D_Atlassian jumped 35.3%, its biggest one-day percentage gain on record, after the collaboration software company forecast quarterly revenue above analysts’ expectations.
_x000D_Microchip Technology rose 13.9%, marking its strongest daily performance in more than 15 months after giving an upbeat revenue outlook.
_x000D_Airbnb gained 17.4% after reporting second-quarter revenue above expectations, making it the strongest performer on the S&P 500.
_x000D_Trade Desk moved in the opposite direction, plunging 21.9% after the advertising technology company issued a weaker-than-expected third-quarter revenue forecast.
_x000D_ _x000D_U.S. Stocks Finish Week Strongly
_x000D_Market breadth remained positive, with advancing shares outnumbering declining stocks by 2.49 to 1 on the New York Stock Exchange and 2.07 to 1 on the Nasdaq.
_x000D_The S&P 500 recorded nine new 52-week highs and one new low. The Nasdaq Composite recorded 123 new highs and 77 new lows.
_x000D_Trading volume reached 16.94 billion shares, compared with an average of 17.56 billion shares over the previous 20 trading sessions.
_x000D_With the latest gains, U.S. stocks enter the next week with strong momentum as investors continue to assess employment data, corporate earnings and the Federal Reserve’s next interest-rate decision.