NEW YORK (AP) — U.S. stocks are flirting with a record Wednesday following an encouraging report that said the nation’s unemployment rate unexpectedly improved last month.

The S&P 500 rose 0.5% and is sitting just below its all-time high set late last month. The Dow Jones Industrial Average was up 222 points, or 0.4%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.5% higher.

Treasury yields also climbed in the bond market immediately after the Labor Department said U.S. employers added 130,000 jobs to their payrolls last month, more than the 75,000 that economists expected. That helped calm worries that had heightened a day earlier, when a discouraging report suggested spending by U.S. households, the main engine of the economy, may be stalling.

To be sure, all is still not perfectly clear for the U.S. economy. Wednesday’s report included major revisions, which said employers added just 181,000 jobs for all of last year, less than a third of the previously reported 584,000. That’s the weakest showing for a year since 2020, when COVID-19 shut down the economy.

“We all knew there would be downward revisions, but these were better than expected,” Brian Jacobsen, chief economic strategist at Annex Wealth Management, said of the markdowns for 2025.

Stocks in the energy and industrial industries jumped to the biggest gains in the S&P 500. Their profits tend to be closely tied to the health of the economy. Caterpillar rose 3.9%, and Exxon Mobil climbed 2.4%.

That helped offset a drop for Moderna, which fell 10.5% after saying the U.S. Food and Drug Administration is refusing to consider its application for a new flu vaccine made with Nobel Prize-winning mRNA technology. It’s the latest sign of the FDA’s heightened scrutiny of vaccines under Health Secretary Robert F. Kennedy Jr.

Robinhood Markets fell 11% even though the trading and investment app reported a stronger profit for the latest quarter than analysts expected. Its revenue fell short of forecasts, and analysts highlighted Robinhood’s forecast for expenses in 2026, along with concerns about how long a slowdown in crypto trading will last.

Kraft Heinz sank 4.1% despite reporting better results for the latest quater than analysts expected. CEO Steve Cahillane said he’s pausing the company’s planned split into two businesses as he tries to return it to profitable growth. He also announced a $600 million investment across marketing, sales and research and development.

In the bond market, the yield on the 10-year Treasury rose to 4.17% from 4.16% late Tuesday. The two-year Treasury yield, which more closely tracks expectations for moves by the Federal Reserve, jumped more. It climbed to 3.51% from 3.45%.

The stronger-than-expected jobs data pushed traders to pare back their bets on how many cuts to interest rates the Fed will make this year, though most are still betting on at least two according to data from CME Group.

The Fed has put its cuts to interest rates on hold, and a further weakening of the job market could have pushed it to resume cuts more quickly. Lower rates can give the economy a boost, though they can also worsen inflation. The next monthly update on inflation at the U.S. consumer level is arriving on Friday.

In stock markets abroad, indexes rose across much of Asia and Europe.

South Korea’s Kospi rose 1%, and the United Kingdom’s FTSE 100 gained 0.9% for two of the bigger moves.

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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.