U.S. stocks closed more than 1 percent higher Friday, more than recovering their post-Brexit losses, after a surprisingly large beat on the June jobs report headline figure.
"What's got us here right now is the pickup in the employment data is signs of hope we're in economic recovery," said Lance Roberts, chief investment strategist at Clarity Financial. "The question becomes, is this a one-month anomaly, or is this the start of a bounce in economic recovery? But stocks are responding in this vein."
The major U.S. indexes closed off session highs. The S&P 500 ended within 1 point of its record close of 2,130.82 hit last May after briefly topping that level in intraday trade. The S&P's all-time intraday high is 2134.72, touched May 20, 2015.
Materials closed nearly 2.5 percent higher to lead all 10 S&P sectors higher. Industrials and financials were the second- and third-best performers. Traders also attributed some of Friday's gains to short covering.
"I'm still a believer we're going to stay in a range. I just don't see what the catalyst is to keep us rallying significantly," said JJ Kinahan, chief strategist at TD Ameritrade.
The Dow Jones industrial average closed about 250 points higher, roughly 1.1 percent below its all-time intraday high of 18,351.36 touched May 19, 2015. The Dow's record close is 18,312.39. Goldman Sachs, Home Depot and Boeing contributed the most to gains as all constituents rose Friday.
"I think the market's focused on external events," said Bernie Williams, chief investment officer, USAA Investment Solutions. The "U.S. is still the safe harbor in the world."
The Dow transports had their best day since mid-April as the index outperformed with gains of 2.55 percent, while the Russell 2000 climbed 2.4 percent in its best day since late March.
"There was a great deal of worry after such weak jobs growth in May and with June's jobs number much, much stronger than expected that provides relief," said Kate Warne, investment strategist at Edward Jones. "At the same time, ... it wasn't so strong to suggest the Fed has to hike rates."
The U.S. dollar index was little changed after swinging higher and lower in the first reaction to the jobs data. The euro was near $1.105 and the yen near 100.5 yen versus the greenback.
The initial reaction to the report called for strength in the dollar index, Andres Jaime, global FX and rates strategist at Barclays, said in an email. "But I think people realized that one number (does) not really change the odds for hikes this year given that major central banks are poised to ease and uncertainty is at all-time highs in Europe."
Longer-end Treasury yields held just above recently touched record lows. The 10-year yield was around 1.36 percent and the 30-year yield was near 2.10 percent. The 2-year yield was higher near 0.61 percent.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 13.2, a one-month low.
"The bonds and the VIX are telling you two different things," Kinahan said. "The VIX seems to be (saying there's) nothing to be worried about."