Stocks ended the day mixed Friday despite the better than expected jobs report, as new fears about economic tensions between the United States and China cast a shadow over Wall Street after President Trump threatened to ban Tencent-owned messaging app WeChat.
The market had been heading for a drop before the jobs numbers came out, so investors clearly were relieved to see a bigger gain in jobs added and larger decline in the unemployment rate than economists had expected.
"This suggests the healing continues and assuages fears that economic momentum is stalling," said Quincy Krosby, chief market strategist for Prudential Financial.
The Dow ended Friday with a gain of nearly 50 points, or 0.2%, after spending most of the day in negative territory. The S&P 500 was largely unchanged while the Nasdaq fell 0.9%. The tech-heavy index managed to stay above 11,000, however, albeit barely.
All three indexes are higher for the week. The Dow rose nearly 4% in the past five days while the S&P 500 and Nasdaq each gained more than 2%.
The Nasdaq is near a record high and there are some signs of froth in the market. The CNN Business Fear & Greed Index, which looks at seven indicators of market sentiment, is in Greed territory and is not far from Extreme Greed levels.
But some tech stocks were facing pressure Friday after Trump's proposed ban of WeChat, which comes shortly after the president issued a similar crackdown on popular social media app TikTok. Microsoft is in talks to buy TikTok from its Chinese parent company, ByteDance.
Shares of WeChat owner Tencent fell more than 5% in Hong Kong.
Shares of Facebook rose more than 1% to a new all-time high. Facebook-owned Instagram just launched a TikTok copycat product named Reels. A ban of WeChat could give Facebook's WhatsApp and Messenger products a boost.
One market analyst said the latest round of tough talk from Trump on China is "noise" that is probably already priced into stocks. And Trump likely realizes that going too far could hurt the top techs that have helped keep the broader market afloat. Think FAANG and Microsoft.
"A lot of the optimism in markets has been based on an idea that there is a recovery underway," said Seema Shah, chief strategist with Principal Global Investors. "The market could face a major struggle if big tech stocks fell under pressure."
Investors are also paying close attention to negotiations in Congress regarding another potential round of new stimulus for struggling Americans after expanded unemployment benefits ran out at the end of last month.
Democrats are pushing for a bigger package than many Republicans want -- and the stronger-than-expected jobs figures could give Republicans more reason to resist calls for additional stimulus.
But the unemployment rate remains substantially higher than where it was before millions of Americans lost their jobs as a result of shutdowns tied to the coronavirus outbreak.
"This jobs number won't motivate Congress to do something but I hope lawmakers don't use this as an excuse. You'd like to see another round of stimulus to help consumers recover," said Yousef Abbasi, global market strategist at StoneX.
What's more, the Federal Reserve seems intent on keeping interest rates near zero for the foreseeable future to try to foster more economic activity.
The bond market seems to understand this. Yields on the benchmark 10-Year Treasury rose slightly Friday. But at a level of just 0.56%, they remain near historic lows.
"The Fed will want to keep rates low for even longer," said Krosby, the Prudential strategist. "The jobs report doesn't change anything for the Fed and the bond market recognizes that."
Investors are also continuing to keep an eye on earnings -- and not just the economy.
Uber disappointed Wall Street late Thursday when it reported another large loss. The company's ridesharing business is now smaller than the Uber Eats food delivery unit as more consumers are staying home.
Uber shares fell 5% and rival Lyft, which reports its latest results next week, dropped nearly 7%.