Economists had been expecting significant job losses and a spike in the unemployment rate to near 20%. But it appears that the reopening of several states has led to more Americans than expected returning to work.
The tech-heavy Nasdaq, home to Apple, Amazon and the rest of the so-called FAANG stocks, also notched a new intraday all-time high of 9,846.
The five most valuable companies in the United States -- Apple, Microsoft, Amazon, Google owner Alphabet and Facebook -- are now collectively worth $5.7 trillion. Netflix -- the N in FAANG -- has a market cap of nearly $185 billion and shares are up 30% this year.
But the market rally isn't just about tech. Dow component Boeing soared 11% on growing optimism about US airlines adding more flights back to their summer schedules. Transportation stocks have helped pushed the broader market higher lately as well.
This widening of the market surge beyond tech is an encouraging sign, according to Bill Callahan, an investment strategist at Schroders.
Callahan said it's healthier for the market and broader economy to have more value-oriented sectors like industrials, energy and banks take part in the rally.
The Dow was up nearly 7% this week and is now down just 5% this year. The S&P 500 surged nearly 5% this week and is down a little more than 1% in 2020. The Nasdaq gained 3.4% this week and is up more than 9% this year.
Investors are clearly ignoring any lingering concerns about the Covid-19 pandemic as well as social unrest in the country as people protest the killing of George Floyd, an unarmed black man, by police in Minneapolis.
"This is a blowout that no one saw coming. I think we just witnessed our first white swan," said Todd Lowenstein, equity strategy executive with The Private Bank at Union Bank. He was referring to how bad news that takes people by surprise is often dubbed a black swan event.
"The healing process is underway and it's sooner than we expected. The worst of the damage in the economy and market may be over -- this is highly encouraging," he added.
The strong jobs report is admittedly just a single month of good news. But JJ Kinahan, chief market strategist with TD Ameritrade, said he thinks the June jobs data that will be reported in early July will show more momentum. That will be good for corporate earnings and stock prices.
Kinahan said he thinks many economist got their jobs forecasts wrong because they underestimated how many people were returning to work and did not recognize how there are some parts of the country where Covid-19 cases haven't been as big an issue as they are in major cities.
But others still think investors need to be cautious.
"The stock market has clearly forecast a V-shaped recovery and it may be a little ahead of itself," said KC Mathews, chief investment officer with UMB Bank.
Mathews worries that the economic comeback will still be slow and gradual --- even if it turns out that the economy did bottom in April.
Still, Mathews conceded that if consumers continue to show more confidence about the economy and job market, then a strong recovery could become a self-fulfilling prophecy.
"It's all going to come down to what the consumer wants. If consumers make the decision that we're done with social distancing then you'll see more people out and about," Mathews said. "That would bode well for the economy."