Stocks finished the week sharply higher, but the reason for Friday’s final push was unusual: the labor market was much weaker than investors expected.

For the week, the S&P 500 gained 3.6%, the Nasdaq Composite jumped 5.2%, the Dow rose 3.0%, and the Russell 2000 advanced 3.5%. The S&P 500 closed Friday at a new record high of 7,757.64.

The rally was driven by a combination of strong corporate earnings, a rebound in technology and software stocks, declining Treasury yields, and falling expectations that the Federal Reserve will raise interest rates in September.

But the week ended with an important question for investors:

Are lower interest-rate expectations enough to outweigh a labor market that may be deteriorating faster than previously believed?

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