Dow soars 700 points after December jobs and services activity reports boost hopes for Fed rate cuts

• US stocks jumped Friday after December payrolls and services-sector data.
• The economic data showed signs of easing inflation, bolstering hopes the Fed will cut interest rates this year.

US stocks jumped Friday as investors embraced the December jobs report and services-sector data as signs the Federal Reserve could decide to start reducing interest rates after sharply tightening them to battle high inflation.

The Labor Department said average hourly earnings rose 0.3% last month, less than the 0.4% consensus estimate from a Bloomberg survey of economists. Headline hiring of 223,000, however, was above the 200,000 consensus estimate.

Meanwhile, the Institute for Supply Management's services-sector report showed prices paid decelerated while services activity shrank for the first time since May 2020.

"Investors appear to be in the mood for seeing the best in any situation," said Chris Beauchamp, chief market analyst at online trading platform IG, in a note. The "general takeaway is weaker data will help to slow down the Fed earlier than expected, or perhaps bring forward the first cut in US rates."

Here's where US indexes stood at the 4:00 p.m. closing bell on Friday:

• S&P 500: 3,895.08, up 2.28%

• Dow Jones Industrial Average: 33,630.61, up 2.13% (700.53 points)

• Nasdaq Composite: 10,569.29, up 2.56%

The daily gains allowed the S&P 500 and the Nasdaq Composite to notch their first weekly advance after four weeks of losses and after getting mauled by a bear market in 2022.

Still, Beauchamp said, "US indices have rallied but have yet to break above recent resistance, suggesting this bounce has yet to really develop the necessary strength for a real rally."

Here's what else is happening today:

• The parent company of crypto lender Genesis reportedly has closed its wealth management unit.
• Billionaire investor Leon Cooperman sees just a 5% chance the S&P 500 pares back the losses it's logged since March 2022.
• WWE shares soared following a surprise comeback announcement by former CEO Vince McMahon to the wrestling group.

In commodities, bonds, and crypto:

• West Texas Intermediate crude was little changed at $73.66 per barrel. Brent crude, the international benchmark, fell o.4% to $78.45.
• Gold rose 1.7% to $1,872.40 per ounce.
• The 10-year Treasury yield sank 16 basis points to 3.55%.
• Bitcoin rose 0.6% to $16,917.11.