Dow closes at record high after blow-out jobs report

Stocks advanced on Friday after an expectations-defying jobs report gave investors confidence around the health of the economy.

The S&P 500 rose 0.9% to 5,751.07, while the Nasdaq Composite jumped 1.22% to 18,137.85. The Dow Jones Industrial Average added 341.16 points, or 0.81%, to an all-time closing high of 42,352.75.

Stocks rose after data showed non-farm payrolls rose by 254,000 jobs in September, beating a forecast gain of 150,000 from economists polled by Dow Jones. The unemployment rate fell to 4.1% despite expectations of holding steady at 4.2%.

“After a summer of weak labor data, this is a reassuring read that the US economy is resilient, supported by a healthy labor market,” said Michelle Kluver, head of ETF model portfolios at Global X. Good economic news is good news for equity markets as it raises the possibility of a soft landing.”

Tesla, Amazon and Netflix were among the megacap tech names that climbed Friday, which may help explain the Nasdaq's outperformance. The S&P 500's top sector during the session was financials, up 1.6% and closing at a record. JPMorgan Chase and Wells Fargo each jumped more than 3%.

At the other end of the spectrum, small-cap stocks also rose, with the Russell 2000 up 1.5%.

Friday's bounce erased losses seen in recent days. Rising geopolitical tensions in the Middle East gave way to a shaky start for stocks in October, a turnaround after the market posted an unusually strong first nine months of the year.

The S&P 500 gained 0.22% for the week, while the Dow rose by 0.09%. The Nasdaq added 0.1% for the week.

Crude oil prices rose again on Friday, bringing week-to-date gains to close to 9%. Oil prices were boosted by heightened conflict in the Middle East after Iran launched a missile attack on Israel.

Energy stocks jumped this week as oil rallied with the S&P 500 sector up 7%. This marked the group's best week since October 2022.