The US stock market surged on Friday, with the S&P 500 closing at an all-time high, after a softer-than-expected jobs report dampened expectations that the Federal Reserve would raise interest rates at its September meeting.

An unexpected rise in initial jobless claims signaled potential cooling in the labor market, leading investors to scale back their bets on further monetary tightening. The Fed operates under a dual mandate to maintain price stability and maximum employment, meaning labor market data carries significant weight in shaping monetary policy expectations. The prospect of a more accommodative Fed policy trajectory provided a powerful tailwind for equities across sectors.

Strong corporate earnings results further propelled the three major US stock indices — the S&P 500, the Dow Jones Industrial Average, and the Nasdaq Composite — upward. The robust earnings season has also alleviated investor concerns about the massive capital expenditures being committed by artificial intelligence-related companies, contributing to a broad-based rally.

Each of the three major indexes recorded its largest weekly percentage gain since mid-April.

Additional support came from the energy sector, where oil prices declined amid advancing peace negotiations. Because energy costs feed directly into consumer prices through gasoline and transportation, the pullback in crude helped ease inflation anxieties that had been building in recent sessions, reinforcing the optimistic mood in equity markets. Investors will be watching upcoming inflation readings, particularly the Consumer Price Index, for further evidence on whether price pressures are sustainably easing toward the Fed's two-percent target.

Source: Economic Times Markets