A week's evidence that the US economy's ill health has been overstated and dovish talk from the Federal Reserve combined to briefly catapult the S&P; 500 Index above its May 2015 record close, leaving stocks on the brink of ending their longest drought of the bull market.

Gains on Friday capped an eight-day rebound of more than 6 per cent that restored $US1.4 trillion of market capitalisation to US shares, value that was erased in the aftermath of the UK vote to leave the European Union. The S&P; 500 advanced more than 1 per cent for the fourth time in two weeks, after stronger June payroll growth calmed concerns sown by May's anaemic number. Banks, technology and retailer shares were among the biggest contributors to the rally.

The benchmark gauge surged as much as 1.6 per cent before closing less than two points below the all-time high. It has spent 286 days trading without making a fresh record, the longest stretch outside a bear market since a 361-day drought in 1960 and '61. The pause came amid concern over rising interest rates and falling profits, after the index more than tripled from its 2009 bottom.

Starting with a report Wednesday showing service providers expanded in June at the fastest pace in seven months, and continuing with Fed minutes that indicated less urgency in the need to raise interest rates, investors have been treated to enough good news to put the Brexit trauma behind them.

"We always felt that the Brexit selloff was overstated, so we're not surprised at the speed of the recovery as we approach all-time highs," said Bruce Bittles, chief investment strategist at Milwaukee-based Robert W. Baird, which oversees $US110 billion. "Stocks have no competition from the bond market. We had 16 straight weeks of outflows, and now the higher price is going to pull people back into the market."

The S&P; 500 added 1.5 per cent to 2129.70 at 4pm in New York, closing at its highest since May 21, 2015, after briefly exceeding the record of 2,130.82.

A report today showed America's job market stirred to life after a two-month lull, as payrolls climbed by the most since October, exceeding the highest estimate in a Bloomberg survey. The jobless rate rose to 4.9 per cent as more people entered the labor force, while wages advanced less than projected. Revisions to prior reports subtracted a total of 6000 jobs to overall payrolls in the previous two months.

The valuations edge held by stocks over bonds has gotten extreme of late as government debt rallied, with the S&P; 500's earnings yield - profits as a proportion of share price - climbing above 5 per cent, or about 3.7 percentage points above the 10-year Treasury rate. The gap is wider than any point during the 2002-2007 rally.

The jobs data will help reassure policy makers that companies are staying the course on hiring in the face of weaker profits and overseas developments such as Britain's vote to leave the EU. Federal Reserve officials flagged concern over job creation at their last meeting, signalling fading urgency for the need to increase interest rates.