Wall Street capped a choppy week of trading Friday with broad gains, which helped push the S&P 500 and Dow Jones Industrial Average to new highs.
The S&P 500 rose 0.2%, a day after setting another all-time high. Every major index notched a weekly gain after slipping last week.
Some of the sharpest action happened in the bond market, where Treasury yields tend to move with expectations for the economy and for inflation. The yield on the 10-year Treasury climbed to 1.31% from 1.21% late Thursday, clawing back all the losses it sustained over the last week.
Investors weighed a government report showing the U.S. job market is making widespread improvements. Most stocks across Wall Street rose following the report, with companies whose profits are most closely tied to the strength of the economy leading the way. Financial companies notched the biggest gains within the S&P 500, climbing 2%. Materials companies also were big winners, adding 1.5%.
"Now, growth looks like it's on a pretty solid footing," said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute.
The S&P 500 rose 7.42 points to 4,436.52. The benchmark index notched a 0.9% gain for the week. The Dow gained 144.26 points, or 0.4%, to 35,208.51. The Nasdaq fell 59.36 points, or 0.4%, to 14,835.76, while the Russell 2000 index of smaller companies rose 11.75 points, or 0.5%, to 2,247.76.
Friday's jobs report showed that hiring was stronger than economists expected, with employers adding 943,000 workers to their payrolls. Average wages also jumped 4% in July from a year earlier, more than economists expected.
Bond yields jumped after economists said the encouraging jobs report will give the Federal Reserve another nudge to pare back its bond-buying program, which is trying to juice the economy by keeping longer-term rates low. Economists say an announcement by the Fed about a possible slowdown in purchases could come as soon as the end of the month.
The solid jobs report and expectations for a recovery in the labor market could nudge investors back toward companies that are poised to benefit from people going out and spending more, including airlines, retailers, restaurants and other firms providing in-person services, Samana said.
The better-than-expected data on the economy took momentum out of technology stocks, which have been some of Wall Street's biggest winners since the pandemic.
They've been big beneficiaries of the ultra-low interest rates the Federal Reserve has brought about. When bonds are paying little in interest, investors are willing to pay higher prices for other kinds of investments, particularly stocks of companies with big earnings growth forecast far in the future.
A rise in interest rates could undercut those stocks, or at least add a headwind that has been largely absent for more than a year. A slowdown in bond purchases by the Fed would be the first step toward raising short-term interest rates off their record low of nearly zero.
That's why the Nasdaq struggled more than other indexes Friday. It's also why the benchmark S&P 500 made mostly listless moves, even though more than 60% of the stocks within the index rose.
Apple, Microsoft, Nvidia and other technology stocks make up 28% of the S&P 500 by market value, more than double the weight of any of the other 10 sectors that comprise the index. That doesn't even include some big tech-oriented companies like Amazon and Tesla.
Those five companies were the biggest weights on the S&P 500.
The biggest gain in the S&P 500 came from Corteva, an agricultural company spun off from DowDuPont. It jumped 8% after reporting stronger revenue and earnings for the latest quarter than Wall Street expected.
That's been the norm for this earnings reporting season. Close to 90% of the companies in the S&P 500 have told investors how much profit they earned during the spring, and their earnings were roughly double what they were a year ago.
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AP Business Writer Joe McDonald contributed.