Bad jobs data lifts Wall Street as S&P 500 hits all-time high

Weaker-than-expected US employment data dampened expectations for further interest rate hikes, pushing the S&P 500 to a new all-time closing high.

The Dow Jones Industrial Average rose 151.83 points, or 0.28 percent, to close at 54,036.93 on Friday.

The S&P 500 gained 47.68 points, or 0.62 percent, to finish at 7,757.64, while the tech-heavy NASDAQ Composite climbed 342.26 points, or 1.30 percent, to close at 26,690.62.

Friday's advance pushed the S&P 500 to a fresh all-time closing high.

For the week, the S&P 500 rose 3.6 percent — its strongest weekly gain since April.

The session illustrated how bad news for the labor market can translate into good news for stocks.

The Labor Department reported that nonfarm payrolls fell by 23,000 in July, far short of the 83,000 gain economists had forecast, according to a Dow Jones survey.

Markets immediately read the weak data as a sign that the Federal Reserve would hold off on raising its benchmark interest rate, reviving investor appetite for riskier assets such as shares.

Meanwhile, warnings of a market bubble are growing as US stocks show signs of overheating.

Warren Buffett, chairman of Berkshire Hathaway, recently warned that the US stock market "is becoming gambling, not investing," adding that "there has never been a time when people were so caught up in a gambling mentality."

Buffett drew a distinction between long-term value investing and short-term speculation, comparing them to a church and a casino, respectively. "Long-term value investing is a church; speculation chasing quick profits is a casino," he said. "The casino has become far too attractive a place. What's happening now is neither investing nor speculation — it's gambling."