The US stock market rallied significantly on Friday following a surprisingly strong jobs report. The broader S&P 500 index rose 0.6%, while the tech-heavy Nasdaq Composite gained 0.7%. The Dow Jones Industrial Average gained 220 points.
The positive market reaction was led by September employment data, which revealed the creation of 254,000 jobs. This figure exceeded analysts’ expectations of 150,000 new jobs and further solidified confidence in a resilient U.S. economy.
Investors were particularly encouraged by the decline in the unemployment rate from 4.2% to 4.1%. This suggests a healthy job market and greater economic stability. Michelle Cluver, head of ETF model portfolios at Global, noted that “good economic news is good news for the stock market” as it increases the likelihood of a soft economic landing.
Several large-cap technology stocks, including Tesla, Amazon and Netflix, contributed to the Nasdaq’s outperformance. Additionally, small-cap stocks have rallied, as evidenced by the Russell 2000’s gain of more than 1%.
Despite Friday’s rebound, the market remains cautious due to ongoing geopolitical tensions in the Middle East. These tensions contributed to a volatile start to October, following an exceptionally strong performance in the first nine months of the year.
The energy sector has seen a notable boost this week, driven by rising crude oil prices amid rising tensions in the Middle East. The S&P 500 energy sector is on track to post its biggest weekly gain in nearly two years.