U.S. stocks rose on Friday, sending the S&P 500 to an all-time high and capping off the major indexes' largest weekly percentage gains since mid-April. Market gains were driven by strong corporate earnings and unexpected U.S. job losses, which lowered expectations that the Federal Reserve would raise interest rates at its September meeting.

Data from the Labor Department showed that nonfarm payrolls decreased by 23,000 jobs last month, well below the forecast of economists polled by Reuters, who had expected an increase of 80,000 jobs. Job gains for the prior two months were revised sharply lower, while the unemployment rate fell from 4.2% in June to 4.1% as workers left the labor force.

Following the data release, CME FedWatch indicated that market expectations for a Fed rate hike at its next meeting dropped to roughly 44%, down from 55% in the previous session and 67% a week ago. Additionally, progress toward a potential peace deal in the Iran war lowered oil prices, easing inflation concerns and pushing Treasury yields down. Under new Fed Chair Kevin Warsh, the U.S. central bank has offered limited forward guidance on monetary policy, causing investors to focus on economic data.

Earnings season results also tempered concerns regarding heavy spending by AI-related companies. Of the 436 S&P 500 companies that reported results through Friday morning, 85.1% beat analyst expectations, surpassing the 68% average benchmark since 1994.

Major Index Closures and Stock Performance:

• S&P 500: Gained 46.48 points, or 0.60%, to close at 7,756.44.
• Nasdaq Composite: Gained 338.81 points, or 1.29%, to end at 26,690.62.
• Dow Jones Industrial Average: Advanced 151.33 points, or 0.28%, to finish at 54,036.43.
• Notable Movers: Airbnb rose as the top performer on the S&P 500 after exceeding second-quarter revenue estimates. SpaceX surged following the expiry of its first share lockup restriction, while Atlassian and Microchip Tech gained on strong quarterly revenue forecasts.
• Decliners: Trade Desk fell sharply as the worst performer on the benchmark index after forecasting third-quarter revenue below expectations.

Tom Siomades, chief market economist at AE Wealth Management in Topeka, Kansas, commented on the market reaction: "You probably have to lower rates to kind of stimulate job growth, but if you lower rates, you're going to also stimulate inflation. So you're kind of in a pickle at this point, and yet the market's just taken off because earnings have been stellar." He added that the market should theoretically react to weak job figures and potential slow growth, "and yet it's not. We're setting records, so go figure."