cheered investors, who shrugged off dimming chances for a U.S. interest rate cut next month. The S&P 500 and
Nasdaq closed at record highs, notching a third week of gains. The Dow closed up 0.41%, near its own record.
Nvidia rose 1.3%, putting its market capitalization at $3.89 trillion. The company is close to overtaking Apple and becoming the world's most valuable company in history. Trading volume was light in a shorter session on the eve of Friday's U.S. Independence Day holiday.
"We are seeing a real bout of irrational exuberance; the stock market is very biased towards optimism," said Kristina Hooper, Chief Market Strategist at Man Group in New York.
"But there's some basis for it. I think there is some level of relief because the jobs report was not as weak as it could have been."
The rally has been fueled by retail investors, who are largely ignoring the inflationary pressure on the horizon, uncertainty around tariffs and "are focused on the tangible, which is today's jobs report," she said.
The S&P 500 gained 51.94 points, or 0.83%, to 6,279.36 and the Nasdaq Composite gained 207.97 points, or 1.02%, to 20,601.10. The Dow Jones Industrial Average rose 344.11 points, or 0.77%, to 44,828.53.
Data showed nonfarm payrolls increased by 147,000 jobs last month, 33% more than the 110,000 jobs forecasted by economists polled by Reuters. Unemployment fell to 4.1% last month, a better result than the 4.3% expected.
Traders quickly priced out chances of an interest-rate cut in July, with the odds of a 25-basis-point reduction in September at 68%, according to CME Group's Fedwatch tool, down from 74% a week ago.
Republicans in the U.S. House of Representatives advanced President Donald Trump's massive tax-cut and spending bill toward a final yes-or-no vote, appearing to overcome internal party divisions over its cost.
The legislation is expected to add $3.4 trillion to the nation's $36.2 trillion debt over the next decade, according to nonpartisan analysts.
Large tax cuts and increased government spending can boost demand in the economy. This can add inflationary pressure, especially when the economy shows signs of strength such as the latest job report.
"Some data points like the job report are positive and charming, but if we just take a step back, the picture is not that great," said Alex Morris, CEO of F/m Investments, which manages $18 billion in Washington, D.C.
For the week, the S&P 500 gained 1.72%, the Nasdaq rose 1.62%, and the Dow climbed 2.3%. The Russell 2000 Small Cap index rose 3.41%.
"It's kind of perplexing," Morris said. "This feels like that last bull rush before all of the data really comes together."
Tripadvisor climbed 16.7% after the Wall Street Journal reported activist investor Starboard Value had built a more than 9% stake in the online travel company.
Datadog jumped 14.9% after the cloud security firm was set to replace Juniper Networks on the S&P 500.
Markets closed early at 1 p.m. ET. Trading volume on U.S. exchanges was 10.85 billion shares, much lighter than the 17.82 billion average for the full session over the last 20 trading days.
