The Dow Jones Industrial Average closed at a record high on Thursday as a softer-than-expected U.S. jobs report eased concerns that the Federal Reserve might raise interest rates in the near term, according to Reuters. A second straight day of steep losses in semiconductor stocks, meanwhile, weighed on the technology-heavy Nasdaq.

The Dow rose 594.83 points, or 1.14%, to close at 52,900.07, Reuters reported. The S&P 500 finished essentially flat, adding 0.01 points to 7,483.24, while the Nasdaq Composite fell 207.36 points, or 0.80%, to 25,832.67. Reuters said it was the Dow's fourth consecutive weekly gain, its longest such streak since October 2024.

The moves followed the June employment report from the U.S. Bureau of Labor Statistics, which showed the economy added 57,000 jobs, well below the roughly 110,000 that economists polled by Reuters had expected. The unemployment rate was 4.2%, slightly lower than the 4.3% forecast.

What the jobs numbers showed

Beyond the headline miss, the BLS also revised down prior months: April payrolls were cut by 31,000 to 148,000 and May by 43,000 to 129,000, leaving the two months a combined 74,000 lower than previously reported. About 720,000 people left the labor force, according to BLS data, pushing the labor force participation rate to its lowest level in more than five years.

Economists cautioned against reading the report as a sign of imminent weakness. "The pace of job growth is plenty strong enough to maintain a steady unemployment rate," Thomas Simons, senior economist at Jefferies, said in comments cited by CNBC, adding that "rate hikes are very unlikely to be necessary this year." Seema Shah, chief global strategist at Principal Asset Management, said the slowdown "reinforces the view that the Federal Reserve is under little pressure to tighten policy," according to CNBC.

Why markets read it as good news

With the Fed weighing whether to tighten policy further, investors treated the softer data as reducing the odds of a near-term rate increase. Expectations for a hike at the Fed's September meeting fell to 55% from 64.1% after the report, according to the CME Group's FedWatch tool cited by Reuters. "It just takes the pressure off the Fed to raise rates in the short term," Adam Sarhan, chief executive of 50 Park Investments, told Reuters.

The rally was uneven beneath the surface. The Philadelphia Semiconductor Index fell about 5.4% in its second straight day of declines, Reuters reported. Nvidia slipped 1.4% and SanDisk dropped 14.1%, while Tesla fell 7.5%. Apple bucked the trend, rising 4.8%. The split helps explain how the blue-chip Dow set a record on the same day the Nasdaq fell.

What to watch

Attention now turns to the Fed's September meeting and to whether the labor-market cooling continues or stabilizes. According to CNBC, futures markets still leave open the possibility of a rate move later in the year even after traders trimmed September expectations. Further semiconductor volatility and upcoming inflation readings are likely to shape how much room the central bank sees to hold or change policy in the months ahead.