NEW YORK - The S&P 500 hit fresh heights as US indices rallied on tech earnings, even as red-hot US jobs data sent the dollar and bond yields up as chances of an early interest rate cut faded.
The US labour market smashed expectations last month in a surprise hiring pick-up, adding 353,000 jobs in January while the Department of Labor revised December's figure sharply higher.
The unemployment rate held steady at 3.7 percent for a third straight month.
"If March wasn't off the table as far as rate cuts were concerned before today's payroll numbers, it's not even in the same room now," said CMC Markets analyst Michael Hewson.
US Federal Reserve boss Jerome Powell earlier this week dampened expectations of a March cut to interest rates, and strong job creation figures and wage gains are likely to give policymakers additional pause.
"The data exemplifies the concerns about inflation that we heard from the Fed," said Kathleen Brooks, research director at XTB.
"This data is too strong for the Fed, and it could lead to a further recalibration of market-based interest rate expectations," she added.
The prospect of higher interest rates for longer sent US bond yields and the dollar climbing.
But a robust labour market is positive in another sense.
"That said this wasn't bad news for US markets given that the prospect of a recession looks even further away than ever," added CMC Markets' Hewson.
A resilient US economy should also mean that company earnings hold up, he said.