US STOCKS-S&P 500, Nasdaq hit new record highs after strong labor data

By Sruthi Shankar and Nikhil Sharma

July 3 (Reuters) - The S&P 500 and the Nasdaq touched fresh record highs on Thursday after a stronger-than-expected jobs report pointed to a resilient labor market amid concerns about U.S. President Donald Trump's tariff policies potentially weighing on the economy.

Nvidia NVDA.O was trading at a record high, up 2.2%, and was track to become the most valuable company in history, with the chipmaker's market capitalization nearing $4 trillion.

Data showed nonfarm payrolls increased by 147,000 jobs last month after an upwardly revised 144,000 advance in May, while economists polled by Reuters had forecast payrolls rising 110,000. Unemployment fell to 4.1% last month, against expectations of a rise to 4.3%.

"We were all expecting the hard data would start to show some cracks, and we really haven't seen that with the jobs report coming in much better than expected," said Brian Klimke, chief market strategist at Cetera Investment Management LLC.

"That just puts the Fed on pause and gives it more time to wait right now because the labor market is really resilient."

Traders quickly priced out chances of an interest-rate cut in July, with the odds of a 25-basis-point reduction in September at 69.2%, according to CME Group's Fedwatch tool, down from 74% a week ago.

The data was released a day early because of the Independence Day holiday on Friday. Trading volumes were lighter than usual on Thursday with markets due to close early, at 1 p.m. ET.

Another dataset showed the number of Americans filing new applications for jobless benefits fell to a six-week low last week.

U.S. services sector activity picked up in June as orders rebounded but employment contracted for the third time this year, underlining the impact of policy uncertainty on businesses.

The S&P 500 .SPX and Nasdaq .IXIC extended their record-winning session as signs of a resilient economy and easing trade tensions following a series of agreements between the United States and other countries continue to propel stocks higher.

Meanwhile, the blue-chip Dow .DJI was just 0.8% below all-time highs touched in December.

All three main indexes were on track to end the holiday-truncated week on a positive note, if gains hold.

Meanwhile, Republicans in the U.S. House of Representatives advanced President Donald Trump's massive tax-cut and spending bill toward a final yes-or-no vote, appearing to overcome internal party divisions over its cost.

The legislation is expected to add $3.4 trillion to the nation's $36.2 trillion in debt over the next decade, according to nonpartisan analysts.

At 10:03 a.m. ET, the Dow Jones Industrial Average .DJI rose 284.02 points, or 0.64%, to 44,769.03, the S&P 500 .SPX gained 41.23 points, or 0.67%, to 6,268.65, and the Nasdaq Composite .IXIC gained 161.74 points, or 0.79%, to 20,554.87.

Shares of chip design software firms Synopsys SNPS.O and Cadence Design Systems CDNS.O climbed 3% and 3.7%, respectively, in premarket trading after the U.S. lifted export restrictions on chip design software to China, signaling a thaw in trade tensions between the world's top two economies.

Tripadvisor TRIP.O climbed 15% after the Wall Street Journal reported activist investor Starboard Value had built a more than 9% stake in the online travel company.

Datadog DDOG.O jumped 9.4% after the cloud security firm was set to replace Juniper Networks on the S&P 500.

U.S. solar stocks jumped in early trading, with First Solar FSLR.O rising about 10% to become the top-performing individual stock on the S&P 500 index.

Advancing issues outnumbered decliners by a 2.53-to-1 ratio on the NYSE, and by a 2.29-to-1 ratio on the Nasdaq.

The S&P 500 posted 36 new 52-week highs and one new low, while the Nasdaq Composite recorded 85 new highs and 13 new lows.