The S&P 500 and Nasdaq have scaled new highs, with the S&P closing up for a seventh straight day, after US jobs data for June showed robust hiring yet persistent weakness in the labour market that will keep the Federal Reserve from raising interest rates any time soon.
The S&P's winning streak was its longest since August 2020.
The Labor Department's employment report showed non-farm payrolls increased by 850,000 jobs last month but the total is 6.8 million below its peak in February 2020.
The better than expected data was a tentative sign that a labour shortage overhanging the US economy was starting to ease but was not enough to force the Fed to raise rates.
Big tech led stocks on Wall Street higher while the yield on the benchmark 10-year US Treasury note slid to 1.432 per cent.
"For capital markets, equities and bonds, this was a goldilocks report," said Darrell Cronk, chief investment officer at Wells Fargo Wealth & Investment Management.
"There were enough jobs that you'd want to see, but not so much that it concerns people that the Fed may have to act sooner."
Investors have feared a stronger than expected recovery and the prospect of surging inflation that could force the Fed to pare its support and raise rates, hurting technology shares whose growth and cash flow is further in the future.
Microsoft Corp added the most to the S&P's broad advance, followed by Apple Inc, Amazon.com Inc and Google parent Alphabet Inc.
Financial stocks, which earn less on lower rates, fell as did utilities.
The Dow Jones Industrial Average rose 154.4 points, or 0.45 per cent, to 34,787.93, the S&P 500 gained 32.51 points, or 0.75 per cent, to 4,352.45 and the Nasdaq Composite added 116.95 points, or 0.81 per cent, to 14,639.33.
Headwinds that have weighed on hiring, including jobless benefits and vaccine concerns, are likely to diminish in the northern hemisphere autumn and might help jobs growth accelerate, said David Joy, chief market strategist at Ameriprise Financial.
"But for now, the recovery in the labour market is not so robust as to bring forward any further the Fed's eventual tightening," Joy said.
The report served as evidence of the economy's ongoing recovery, said Bill Northey, senior investment director at US Bank Wealth Management.
"Some of the most impaired corners of the US economy, namely retail, leisure and hospitality, showed some of the strongest improvements," Northey said.
Focus now shifts towards the second-quarter earnings season and progress on US President Joe Biden's infrastructure bill that could help the equity market keep the momentum.
Investors will look to minutes from the Fed's June meeting next week for the latest view on inflation, bond tapering and rates at a time when the easy monetary stance appears to be at an inflection point amid a booming US economy.
Trading volumes were light heading into the long weekend, with US markets shut on Monday in observance of Independence Day.
Tesla Inc slid after it posted record vehicle deliveries for the second quarter that also beat Wall Street estimates.
Virgin Galactic Holdings rose after the space tourism firm said billionaire entrepreneur Richard Branson would travel to the edge of space on the company's test flight on July 11, beating out fellow aspiring billionaire astronaut Jeff Bezos.
Didi Global Inc fell after China's cyberspace administration said it would conduct a new investigation into the Chinese ride-hailing giant to protect national security and the public interest.