NEW YORK, June 2 (Xinhua) -- U.S. stocks posted handsome gains on Friday as investors cheered the passage of a debt ceiling bill by the U.S. Congress and the release of an encouraging jobs report.
The Dow Jones Industrial Average rose 701.19 points, or 2.12 percent, to 33,762.76. The S&P 500 added 61.35 points, or 1.45 percent, to 4,282.37. The Nasdaq Composite Index increased 139.78 points, or 1.07 percent, to 13,240.77.
All of the 11 primary S&P 500 sectors ended in green, with materials, industrials and energy sectors leading the gainers up 3.37 percent, 2.96 percent and 2.96 percent, respectively. Meanwhile, the communication services sector registered the smallest growth of 0.1 percent.
The U.S. Senate passed a wide-ranging legislation late Thursday that suspends the debt ceiling until Jan. 1, 2025 while imposing restraints on federal spending, ending a drama that risked an unprecedented U.S. default and a financial crisis. The measure now goes to the U.S. President Joe Biden's desk for his signature.
Biden could sign the bill suspending the debt ceiling as soon as Saturday, White House Press Secretary Karine Jean-Pierre told reporters on Friday, with the Treasury Department signaling there is enough time to avoid running out of cash.
The U.S. federal government will not run out of cash and can pay its bills on Monday. Now that the debt ceiling drama is over, the focus shifts back to how resilient the economy is and will the disinflation process resume, said Craig Erlam, senior market analyst at OANDA, a supplier of online multi-asset trading services.
U.S. stocks advanced Friday as markets cheered a strong jobs report, which led some investors to believe a recession might be further away than previously assumed. Meanwhile, the higher-than-anticipated unemployment rate gave investors hope that the Federal Reserve could pause rate hike at the policy meeting later this month.
The Labor Department reported on Friday that the U.S. economy added 339,000 jobs in May, better than market expectations of 190,000 and April's upwardly revised rate of 294,000.
The U.S. unemployment rate rose to 3.7 percent in May, an uptick from April's 3.4 percent. Meanwhile, average hourly earnings rose 0.3 percent in May. On an annual basis, the key inflation indicator grew 4.3 percent, according to the Labor Department.
Many investors are now anticipating the Federal Reserve might pause its interest rate hikes this month, despite the stronger-than-expected job gains in May, as the labor market report also showed that the unemployment rate rose to 3.7 percent and hourly earnings growth matched consensus forecasts, said Brian Vendig, president at MJP Wealth Advisors, in an interview with MarketWatch.
The Federal Reserve should be open to raising interest rates by a half percentage point in July if it opts to hold off from tightening credit this month, said former U.S. Treasury Secretary Lawrence Summers, in an interview with Bloomberg.
"We are again in a situation where the risks of overheating the economy are the primary risks that the Fed needs to be mindful of," said Summers.