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S&P 500 up 0.83%; Nasdaq gains 1.02%; Down up 0.77%

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US job growth beats expectations in June

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Tripadvisor ( TRIP ) gains on report Starboard Value built stake

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Synopsys, Cadence rise as US lifts China export curbs

(Adds stocks data, context)

By Sabrina Valle

NEW YORK, July 3 (Reuters) -

Wall Street rallied to record highs Thursday, as chip-maker

Nvidia ( NVDA ) rose closer to a $4 trillion valuation and a surprisingly

strong U.S. jobs report cheered investors, who shrugged off

dimming chances for a U.S. interest rate cut next month.

The S&P 500 and Nasdaq closed at record highs, notching

a third week of gains. The Dow closed up 0.41%, near its own

record.

Chipmaker

Nvidia ( NVDA ) rose 1.3%, putting its market capitalization

at $3.89 trillion. The company is close to overtaking Apple

and becoming the world's most valuable company in

history.

Trading volume was light in a shorter session on the eve

of Friday's U.S. Independence Day holiday.

"We are seeing a real bout of irrational exuberance; the

stock market is very biased towards optimism," said Kristina

Hooper, Chief Market Strategist at Man Group in New York.

"But there's some basis for it. I think there is some

level of relief because the jobs report was not as weak as it

could have been."

The rally has been fueled by retail investors, who are

largely ignoring the inflationary pressure on the horizon,

uncertainty around tariffs and "are focused on the tangible,

which is today's jobs report," she said.

The S&P 500 gained 51.94 points, or 0.83%, to

6,279.36 and the Nasdaq Composite gained 207.97 points,

or 1.02%, to 20,601.10. The Dow Jones Industrial Average

rose 344.11 points, or 0.77%, to 44,828.53.

Data showed nonfarm payrolls increased by 147,000 jobs last

month, 33% more than the 110,000 jobs forecasted by economists

polled by Reuters. Unemployment fell to 4.1% last month, a

better result than the 4.3% expected.

Traders quickly priced out chances of an interest-rate cut

in July, with the odds of a 25-basis-point reduction in

September at 68%, according to CME Group's Fedwatch tool, down

from 74% a week ago.

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 debt over the next decade, according to

nonpartisan analysts.

Large tax cuts and increased government spending can boost

demand in the economy. This can add inflationary pressure,

especially when the economy shows signs of strength such as the

latest job report.

"Some data points like the job report are positive and

charming, but if we just take a step back, the picture is not

that great," said Alex Morris, CEO of F/m Investments, which

manages $18 billion in Washington, D.C.

For the week, the S&P 500 gained 1.72%, the Nasdaq rose

1.62%, and the Dow climbed 2.3%. The Russell 2000 Small Cap

index rose 3.41%.

"It's kind of perplexing," Morris said. "This feels like

that last bull rush before all of the data really comes

together."

Tripadvisor ( TRIP ) climbed 16.7% after the Wall Street

Journal reported activist investor Starboard Value had built a

more than 9% stake in the online travel company.

Datadog ( DDOG ) jumped 14.9% after the cloud security firm

was set to replace Juniper Networks on the S&P 500.

Markets closed early at 1 p.m. ET. Trading volume on

U.S. exchanges was 10.85 billion shares, much lighter than the

17.82 billion average for the full session over the last 20

trading days.