U.S. stocks closed solidly higher Friday as a stronger-than-expected jobs report reassured investors who had worried the economy may be getting too weak.

U.S. job gains increased in September by the most in six months, and the unemployment rate fell to 4.1%, the report showed.

Traders further reduced bets on a 50-basis-point reduction at the Federal Reserve's Nov. 6-7 meeting. Traders are now pricing in just an 8% chance of a 50-bps rate cut, down from around 31% earlier on Friday, the CME Group's FedWatch Tool showed.

The data "basically tells us economic activity in the fourth quarter is likely to remain at a solid pace," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

"It's a good surprise, but I also think it may now slow the pace of rate cuts."

The Fed kicked off a monetary easing cycle last month by cutting rates 50 bps.

Small caps outperformed, with the Russell 2000 index gaining. The S&P 500 financials index also rose.

According to preliminary data, the S&P 500 gained 50.59 points, or 0.89%, to end at 5,750.53 points, while the Nasdaq Composite gained 216.85 points, or 1.21%, to 18,135.33. The Dow Jones Industrial Average rose 331.40 points, or 0.79%, to 42,342.99.

The S&P energy index was up again following oil prices higher. With tensions in the Middle East escalating, the index was also up sharply for the week.

U.S. President Joe Biden said that if he were in Israel's shoes, he would think about alternatives to striking Iranian oil fields, adding he thinks Israel has not yet concluded how to respond to Iran's missile barrage this week.

U.S. ports on the East and Gulf coasts reopened, but clearing the cargo backlog will likely take time.

Spirit Airlines shares dropped while other airlines jumped after a report showed Spirit was in talks with bondholders about a potential bankruptcy filing. Frontier Group , United Airlines and American Airlines all rose sharply.

Rivian shares fell after the electric vehicle startup cut its full-year production forecast and delivered fewer vehicles than expected in the third quarter.

Third-quarter earnings for S&P 500 companies are expected to unofficially begin next week. The season kicks off, with bullish investors hoping results will justify increasingly rich valuations in the stock market.