NEW YORK—U.S. stocks ended a volatile week with a strong Friday rally as a weaker-than-expected jobs report eased concerns that the Federal Reserve would raise interest rates again this month.
The S&P 500 climbed 0.7% Friday to 7,722.72, leaving the benchmark less than 1% below its record high. The Dow Jones Industrial Average rose 0.5% to 51,176.96, while the technology-heavy Nasdaq Composite advanced 1.2% to 27,190.86.
For the week, the picture was more mixed. The S&P 500 slipped about 0.3% and the Dow fell 1.3%, while the Nasdaq gained roughly 0.5%. The Russell 2000 index of smaller companies declined about 0.2%.
Markets spent much of the week wrestling with sharply higher government-bond yields. The 10-year Treasury yield briefly reached 5.34%, its highest level since 2002, putting pressure on stocks as investors adjusted to higher borrowing costs and more attractive returns in the bond market.
That pressure eased Friday after the Labor Department reported that employers added just 29,000 jobs in September, well below expectations, while the unemployment rate increased to 4.2%. Previous months’ job gains were also revised lower.
The report quickly changed expectations for Federal Reserve policy. Market expectations for another rate increase at the Fed’s October meeting dropped substantially during the week, helping lift rate-sensitive stocks and technology shares.
Technology remained one of the market’s strongest areas. Nvidia helped lift the major indexes Friday, while Tesla jumped 4.7% after reporting vehicle deliveries that exceeded expectations. Continued spending on artificial intelligence infrastructure has also helped sustain investor interest in technology stocks despite higher interest rates.
Not every major company participated in the rally. Nike shares dropped 3.6% Friday as investors reacted to weakness in China and concerns about the company’s outlook. Storage companies Western Digital and Seagate also suffered sharp declines during the session.
Stocks nevertheless remain firmly higher for the year. Through Friday, the Nasdaq was up about 17% in 2026, the Russell 2000 had gained 14.1%, the S&P 500 was ahead 12.8% and the Dow had risen 6.5%.
Investors now turn toward third-quarter earnings season and the Federal Reserve’s Oct. 27-28 meeting. Corporate profits are expected to show strong year-over-year growth, while Wall Street will be watching closely for signs that heavy spending on artificial intelligence is translating into stronger earnings.
The combination of elevated Treasury yields, slower hiring and persistent inflation leaves the market entering October with competing forces: expectations for continued corporate earnings growth on one side and uncertainty over interest rates and borrowing costs on the other.