NEW YORK: The S&P 500 and the Nasdaq rose to their highest levels in two weeks on Friday as strong US jobs growth blunted the impact of an escalating US-China trade dispute.

Nonfarm payrolls increased by 213,000 jobs last month, the US Labour Department said, topping expectations of 195,000, while the unemployment rate rose from an 18-year low to 4 per cent and average hourly earnings rose 0.2 per cent. The moderate wage growth allayed fears of a strong build-up in inflation pressures.

The positive news from the US employment report offset, at least for the moment, heightened trade tensions between the United States and China. The two countries slapped tit-for-tat tariffs on $34 billion (Dh124.78 billion) worth of each other’s imports on Friday.

Beijing accused the White House of triggering the “largest-scale trade war.” US stock futures traded downward on Friday morning after the tariffs went into effect but reversed course after the release of the jobs report. By the market open, stocks were rising.

“The market turned its frown upside down, and it’s been in the green ever since,” said Kim Forrest, senior portfolio manager at Fort Pitt Capital Group in Pittsburgh. “This really is the best outcome we could have hoped for, more jobs without a whole lot of wage pressures.” The Dow Jones Industrial Average rose 133.24 points, or 0.55 per cent, to 24,489.98, the S&P 500 gained 25.88 points, or 0.95 per cent, to 2,762.49 and the Nasdaq Composite added 101.94 points, or 1.34 per cent, to 7,688.37.

All of the 11 major S&P 500 sectors posted gains.

Although US stocks appeared minimally affected by US and Chinese tariffs going into effect, some investors warned that prolonged trade tensions could roil the markets, as they have on several occasions this year.

US President Donald Trump also warned the United States may ultimately target over $500 billion worth of Chinese goods, an amount that roughly matches its total imports from China last year.

“You’re going to get some stalling of the market, should trade issues begin to accelerate,” said Gerry Sparrow, a portfolio manager for Interactive Brokers Asset Management, a Boston-based online investing company.

Shares of Biogen Inc rose 19.2 per cent and were on track for their biggest percentage gain in more than 14 years after the company and Japanese drugmaker Eisai Co said their Alzheimer’s drug showed promise in a mid-stage trial.

Biogen added the most gains to the S&P 500.

The S&P 500 health care index rose 1.5 per cent, the greatest percentage gain among the S&P’s major sectors, while the Nasdaq biotech index jumped 3.6 per cent.

Besides Biogen, technology heavyweights Apple Inc, Microsoft Corp and Facebook Inc provided the biggest boost to the markets. The S&P technology index rose 1.3 per cent.

Advancing issues outnumbered declining ones on the NYSE by a 3.17-to-1 ratio; on Nasdaq, a 2.31-to-1 ratio favoured advancers.

The S&P 500 posted 20 new 52-week highs and two new lows; the Nasdaq Composite recorded 117 new highs and 17 new lows.