The S&P 500 was 2.2% higher in afternoon trading and on track to close out its first winning week in the last five. The gains were broad, with about 95% of the stocks in the benchmark index marching higher.

The Dow Jones Industrial Average was up 673 points, or 2.1%, at 33,605, as of 2:34 p.m. Eastern time, and the Nasdaq composite was 2.5% higher.

Markets worldwide got an initial jolt from the U.S. jobs report.

EY Parthenon’s chief economist, Gregory Daco, told Fortune it’s a “Goldilocks jobs report” that points to a “gently easing” labor market.

Workers’ wage gains are slowing, which could mean easing pressure on the nation’s high inflation.

“Today’s payrolls report was nirvana for the bulls,” David Russell, VP Market Intelligence at TradeStation Group, told Fortune. “Wage growth slowed even as unemployment fell. The participation rate ticked up as long-term joblessness fell. These numbers seem to point toward a soft landing, with covid-fueled inflationary pressures still easing.”

On the downside, the jobs report also showed hiring across the job market may still be too strong for the Fed’s liking, even after its fusillade of rate hikes last year.

Analysts warned trading may remain turbulent in the coming hours and weeks as investors keep trying to handicap whether the economy can avoid a recession. Much of the trading is based entirely on expectations for what the Fed will do with rates: High rates slow the economy by design, hoping to grind down inflation, while also threatening to cause a recession and dragging down prices for all kinds of investments.

Perhaps the clearest action for investors was in the bond market, where the yield on the two-year Treasury dropped to 4.27% from 4.48% just before the release of the data on the U.S. jobs market.

That yield tends to track expectations for Fed action, and more investors are betting the central bank will dial down the size of its next rate hike following Friday’s data.

Key for them was the reading showing wages for workers across the country rose 4.6% in December from a year earlier. It’s the smallest raise for workers since two summers ago, and it came despite economists’ expectations for an acceleration.

While weaker raises hurt workers, particularly when they’re still not keeping up with inflation, economists say they could keep the economy out of a vicious cycle where big gains in pay push employers to raise prices for their own products, leading to even higher inflation. It’s something the Federal Reserve has talked about preventing, part of the reason why it’s been hiking interest rates at economy-shaking speed.

“As long as wage gains are coasting to a sustainable altitude, the Fed might continue to throttle back its rate hikes,” said Brian Jacobsen, senior investment strategist at Allspring Global Investments.

A separate report also showed that activity in U.S. services industries surprisingly contracted last month, the first time that’s happened since 2020. Analysts said that’s likely due in part to the rate hikes already pushed through by the Fed, and the weakness could also reduce pressure on the nation’s inflation.

That report helped steady the stock market following a shaky morning and sent it ripping higher again. After opening the day with an initial pop of 1.2%, the S&P 500 lost almost all of it within minutes as Wall Street struggled with how to interpret the U.S. jobs report and what it means for the Fed and rates.

The Fed has pulled its key overnight rate up to a range of 4.25% to 4.50% after it began last year at virtually zero.

With inflation showing some signs of cooling in recent months, the Fed last month stepped down the size of its rate increase to 0.50 percentage points from four straight hikes of 0.75 points. Traders are largely betting on the Fed to move to the more traditional hike of 0.25 points at its meeting next month.

Past rate hikes have already meant big pain for areas of the economy that do best when rates are low, such as housing.

In coming weeks, companies across industries will show how widespread the damage is when they report how much profit they made during the last three months of 2022.

If companies across the S&P 500 report a drop in overall earnings per share, as some analysts suspect, it would be the first decline since the summer of 2020.

On Friday, retailer Costco Wholesale jumped 7.1% for one of the biggest gains in the S&P 500 after it reported stronger sales for December.

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AP Business Writer Yuri Kageyama contributed.