The Dow Jones Industrial Average and S&P 500 closed at records on Friday and tech shares rallied as a weaker-than-expected U.S. jobs report eased fears about rising inflation.
The Dow closed up 229 points, or 0.66%, to 34,777, the S&P 500 rose 0.74% to 4,232, and the tech-heavy Nasdaq gained 0.88% to 13,752.
The Dow and S&P 500 also traded at all-time intraday highs on Friday.
For the week, the Dow rose 2.7%, the S&P 500 gained 1.2% and the Nasdaq fell 1.5%.
U.S. employers added 266,000 jobs in April, far below forecasts that called for close to 1 million. Wages jumped, rising 0.3% on the year, suggesting new workers will need to be paid even higher salaries if they are to return to the workforce.
"These numbers are extremely disappointing for the economy, but strangely enough not for the market," said Cliff Hodge, chief investment officer for Cornerstone Wealth in Charlotte.
"The market is rallying as the disappointment leaves the door open for the (Federal Reserve) to keep financial conditions easy for longer and delays the tapering and rate-hiking conversations for the time being."
"The report also highlights the unintended consequences of all the stimulus that has been pumped into the economy. People aren’t being incentivized to work. Available jobs are plentiful, yet businesses are having a very difficult time filling them as potential employees are flush with cash from the recent rounds of stimulus checks," Hodge added.
The unemployment rate last month edged higher to 6.1%.
Treasury yields rose to 1.577%. The benchmark 10-year Treasury dropped briefly to below 1.5% on Friday as inflation risks ebbed.
Stocks have traded higher in recent weeks amid optimism that the pandemic in the U.S. was receding. Vaccination programs have helped people get back to work and allowed restrictions to be lifted.
But with the reopening of the economy has come concern about rising inflation and worries the Federal Reserve could begin tapering its $120 billion of monthly asset purchases.
The Federal Reserve has remained united in its message on inflation risks and its commitment to keeping interest rates at record lows for at least the next two years.
However, economists have begun suggesting that the Fed is increasingly likely to start pulling back on its monthly bond purchases in the second half of the year.
The Federal Reserve said Thursday in its semiannual financial stability report that elevated risk appetite was increasing "vulnerabilities" in the U.S. financial system.
"Vulnerabilities associated with elevated risk appetite are rising,” said Fed Gov. Lael Brainard, the head of the Fed's financial stability committee, in a statement.
“The combination of stretched valuations with very high levels of corporate indebtedness bear watching because of the potential to amplify the effects of a re-pricing event.”
Some asset prices "may be vulnerable to significant declines should risk appetite fall," the central bank cautioned.
Copper prices soared to an all-time high on expectations demand will increase as economies reopen.
Peloton Interactive (PTON) - Get Report finished up slightly Friday after the fitness technology company said revenue in its fiscal third quarter than doubled and that the hit it will take from a recall of its treadmills would be less than feared.