S&P 500 Hits Record as Weak Jobs Data Eases Fed Hike Fears

US stocks finished higher on Friday as weaker-than-expected July jobs data reduced expectations for a Federal Reserve interest rate hike in September. The S&P 500 climbed to a record high, while the Nasdaq Composite and Dow Jones Industrial Average also posted gains.

The S&P 500 rose 0.6% to finish at 7,756.44, its highest level yet, driven by a rebound in technology and growth stocks. The Nasdaq Composite surged 1.3% to 26,690.62, while the Dow Jones Industrial Average gained 151 points, or 0.3%, to close at 54,036.43.

Investor sentiment improved after the Labor Department reported a decline of 23,000 nonfarm payrolls in July, versus economists' expectations for an increase of around 80,000 to 83,000 jobs. The unemployment rate fell to 4.1% from 4.2%, but labor force participation dropped to its lowest level in more than five years.

The weaker labor market data reduced the likelihood of a September rate hike, with the CME FedWatch tool indicating a 44% probability, down from 55% a day earlier and around 67% a week ago. Corporate earnings also remained a key driver of market performance, with strong quarterly results helping offset concerns surrounding AI-related spending and enterprise software demand.