S&P500 and Dow Jones: Strong Payrolls Data Lifts US Indices, Tesla Spurs Tech Rally

Wall Street Climbs on Jobs Report; Tesla Leads Tech Rebound

U.S. stocks are trading higher Friday as a stronger-than-expected payrolls report eases recession fears and tempers expectations for aggressive Federal Reserve rate cuts. Tesla is rebounding sharply, helping lift the broader tech sector.

Is the Labor Market Still Providing Support?

Nonfarm payrolls increased by 139,000 in the latest reading, surpassing economist forecasts of 130,000. While April’s figure was revised down to 147,000, the overall pace of job growth remains steady. The unemployment rate holds at 4.2%, in line with expectations.

Traders are pushing back rate cut expectations, now favoring a September move with just one cut projected by year-end. The labor data follows weaker readings from private payrolls and the services sector earlier this week that had stirred slowdown concerns. But Friday’s numbers suggest the job market is not unraveling, reinforcing the Fed’s current pause stance.

Could Fed Patience Persist with Trade Talks Back in Focus?

Fed policymakers are still widely expected to stay on hold at the upcoming meeting, and Friday’s labor figures are giving them room to do so. Meanwhile, market participants are monitoring trade developments, as the White House indicates U.S.-China trade talks could resume within a week. A recent call between Presidents Trump and Xi helped ease tensions, though major issues remain unresolved.

Easing trade rhetoric has supported a broad May rally. The S&P 500 is trading near three-month highs and remains less than 2.5% from February’s record. The Nasdaq and Dow are also trending higher.

Is Tesla Powering a Tech Sector Recovery?

Tesla shares are rebounding 5.5% following Thursday’s sharp selloff sparked by political headlines involving CEO Elon Musk. The rebound is contributing to a broader tech rally, with the Nasdaq up nearly 1% midday. Amazon and Alphabet are also adding 1.5% and 2.6%, respectively, while the S&P 500 tech sector is up 0.9%.

On the downside, Broadcom is down 3.6% after offering a revenue forecast that failed to meet investor expectations. Lululemon is plunging over 20% after slashing its annual profit outlook due to rising tariff-related costs. DocuSign is sliding 18.5% following lackluster quarterly results.

What’s the Market Outlook Into the Fed Meeting?

Equities are maintaining upward momentum as Friday’s labor data reinforces confidence in the economic backdrop. Breadth remains strong with 10 of 11 S&P sectors in positive territory, led by energy and tech. Traders will be focused on next week’s Fed meeting for any signals on rate direction and economic projections. For now, steady labor figures and reduced trade risk continue to support the bullish bias.

More Information in our Economic Calendar.