The S&P 500 gained 3.4% on Friday, as Fed Chairman Jerome Powell signaled patience and flexibility on rates in light of stronger-than-expected jobs data. Friday's gains helped the benchmark index secure a weekly gain of 1.9%.

The Dow Jones Industrial Average (+3.3%), the Nasdaq Composite (+4.3%), and the Russell 2000 (+3.8%) also sported sizable gains to finish the week up 1.6%, 2.3%, and 3.2%, respectively.

All 11 S&P 500 sectors closed the session in the green, with gains ranging from 1.0% (real estate) to 4.4% (information technology). Apple (AAPL 148.26, +6.07, +4.3%), for its part, recouped nearly half of its losses from Thursday.

The major averages began the day on a higher note, helped by optimism surrounding upcoming trade talks with China next week and a robust Employment Situation Report for December.

Specifically, nonfarm payrolls (Briefing.com consensus 180,000) exceeded expectations with an increase of 312,000, while average hourly earnings (Briefing.com consensus +0.2%) increased 0.4%, lifting the year-over-year growth rate to 3.2%.

There were some market concerns about how the Federal Reserve would respond to the strong jobs report. The latest comments from Fed Chair Powell, however, eased those concerns, evident from stocks soaring to session highs -- and maintaining their gains.

Some talking points from the Fed Chair that soothed the market included (1) the Fed will remain patient given the muted reading on inflation, (2) monetary policy will be nimble and shift if necessary, and (3) his softer tone regarding previous comments on the Fed's balance sheet reduction path being on autopilot.

The CBOE Volatility Index (VIX) fell 4.1 points to 21.38, reaching its lowest level since mid-December.

U.S. Treasuries ended the week sharply lower, surrendering their gains from Thursday. The 2-yr yield dropped 10 basis points to 2.48%, and the 10-yr yield dropped 11 basis points to 2.66%. The U.S. Dollar Index lost 0.1% to 96.17.

Reviewing the Employment Situation Report for December, which was the only economic report on Friday:

• December nonfarm payrolls increased by 312,000 (Briefing.com consensus 180,000). Over the past three months, job gains have averaged 254,000 per month. November nonfarm payrolls revised to 176,000 from 155,000. October nonfarm payrolls revised to 274,000 from 237,000.
• December private sector payrolls increased by 301,000 (Briefing.com consensus 175,000). November private sector payrolls revised to 173,000 from 161,000. October private sector payrolls revised to 281,000 from 251,000.
• December unemployment rate was 3.9% (Briefing.com consensus 3.7%) versus 3.7% in November.
• The average workweek in December was 34.5 hours (Briefing.com consensus 34.5) versus 34.4 hours in November.
• The key takeaway from the report is that employment data are unlikely to deter the Federal Reserve from its tightening path, especially if average hourly earnings growth remains on its current trajectory.

Looking ahead, investors will receive the ISM Non-Manufacturing Index for December on Monday.

• Russell 2000 +2.4% YTD
• Nasdaq Composite +1.6% YTD
• S&P 500 +1.0% YTD
• Dow Jones Industrial Average +0.5% YTD