Stocks surged higher on Friday after a strong May jobs report and news late Thursday that the Senate passed the debt ceiling bill, easing fears over a US debt default and a marked slowdown in the economy.

The S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) rose above 1% while the Dow Jones Industrial Average (^DJI) rallied more than 2%.

The US economy added 339,000 nonfarm payroll jobs last month while the unemployment rate rose to 3.7%, data from the Bureau of Labor Statistics showed Friday. This marks the 14th straight month that job creation came in above what Wall Street economists had expected.

Economists had expected the report to show payrolls rose by 195,000 while the unemployment rate was expected to tick up to 3.5%.

“Nonfarm payrolls are the elephant in the room,” Bank of America US economist Michael Gapen wrote in a note to clients on Friday. “The strength in this metric alone means that a June hike remains on the table in the event of a very strong CPI report on June 13, even if it is not the base case at the moment. And perhaps more important, the continued resilience of the labor market means there is still a strong case for additional hikes later in the year.”

Meanwhile, debt ceiling fears are diminishing among investors as the Senate voted to approve a bill that will raise the US debt ceiling for two more years. Easing debt ceiling worries propelled stocks higher on Thursday, with all three of the major averages closing the first day of June in the green.

President Joe Biden smiles as he walks from Marine One upon arrival on the South Lawn of the White House, Thursday, June 1, 2023, in Washington. Biden is returning from Colorado. (AP Photo/Alex Brandon)

On the earnings front, athletic apparel brand Lululemon (LULU) posted better-than-expected results and boosted its full-year revenue guidance. Lululemon now expects full-year revenue in a range of $9.44 billion to $9.51 billion. Previous guidance had been for a range of $9.3 billion to $9.41 billion.

Shares of Lululemon rose as roughly 12% on the news.

“LULU continues to exhibit strong momentum, driven by product innovation, investments in growth/demand creation, and the benefit of not being exposed to the wholesale channel,” Wedbush Securities analyst Tom Nikic wrote in a note to clients on Friday morning.

Elsewhere on the earnings side, shares of MongoDB (MDB) were up nearly 30% early Friday after the company reported top- and bottom-line results on Thursday that beat expectations.

The database management company also became the latest name in the tech industry to benefit from a mere mention of AI, with CEO Dev Ittycheria saying in the company’s earnings release: “We believe the recent breakthroughs in AI represent the next frontier of software development.

“The move to embed AI in applications requires a broad and sophisticated set of capabilities while enabling developers to move even faster to create a competitive advantage. We are confident MongoDB’s developer data platform is well positioned to benefit from the next wave of AI applications in the years to come.”

Josh is a reporter for Yahoo Finance.

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