S&P closes at record high as soft jobs report eases rate-hike concerns

The US stock market reached record highs on Friday, following a strong week of gains across major indexes. The S&P 500 closed at a record high, with the Nasdaq and Dow also climbing to new peaks. This surge occurred following an unexpected drop in US nonfarm payrolls, which reported a decrease of 23,000 jobs last month, significantly below the expected 80,000 jobs.

This decline in job growth has eased concerns about the Federal Reserve raising interest rates during its September meeting, as market expectations for a rate hike dropped to 44% from previous estimates. Additionally, revised data showed that job gains for the prior two months had been significantly lower than initially reported, and the unemployment rate fell to 4.1% in June from 4.2% due to workers exiting the labor force.

These factors have contributed to a more favorable outlook for the economy, allowing the market to set records despite this negative economic data. The market's reaction to these numbers has been driven by strong earnings seasons, which have tempered concerns about increased spending by AI-related companies, pushing each of the major indexes to their biggest weekly percentage gains since mid-April.