Wall Street closed out the week on a high, clinching its best levels of the year as confidence in the U.S. economy spiked.
A blowout jobs report calmed fears of weakness in the labor market, while assuring investors that the broader economy was on good footing heading into the back half of the year.
Since Tuesday, the S&P 500 rose 1.3%, the Dow Jones Industrial Average added 1.1%, and the Nasdaq gained 1.9%. Markets were closed on Monday in celebration of Independence Day.
Friday's gains pushed the S&P 500 and Dow to close at near record highs. The Dow recaptured a level above 18,000 earlier in the session.
The U.S. nonfarm payrolls report showed that 287,000 jobs were added in June, well above economists' expectations of 175,000. The report was the best beat since December 2009. The 35,000 workers returning from a May strike at Verizon boosted the headline figure.
"This surprisingly strong job report will probably put a 2016 rate increase back into the conversation," said Chris Gaffney, president of EverBank World Markets.
A rate hike from the Federal Reserve in December, the meeting with the highest likelihood, now has a probability of 22.8%, according to CME Group Fed funds futures. The likelihood of a December rate hike was previously at 18.4%. The chances of a rate hike in July are virtually non-existent.
Worries over the timeline and execution of the Brexit made for rocky trading at the beginning of the week. Markets have been volatile after the June 23 vote as the pro-exit result blindsided global markets betting on the likelihood the U.K. would opt to remain in the EU. The results will have major political and economic implications for the region over the next two years and beyond as the country negotiates how exactly it will separate from the 28-nation bloc.
