The job market is still robust. China took action to stimulate its slowing economy. And Federal Reserve Chairman Jerome Powell said the Fed will be flexible in its plan to hike interest rates. All three of those events addressed issues that investors have been particularly concerned about over the past several months.

The Dow soared 747 points, or 3.3% — its fourth-biggest point increase of all time. The Dow has now surged 1,641 points, or 8%, since Christmas Eve.

The S&P 500 rose 3.4% and Nasdaq was up 4.3%.

Every sector of the market was up Friday. Only 16 of the stocks in the S&P 500 index were negative. AMD ( AMD ), which led all S&P 500 stocks in 2018, was up another 11%.

Riskier stocks led the rally, including tech companies that have gotten killed lately: Facebook ( FB ) rose 5%, Apple ( AAPL ) was up 4% after its worst day in six years. Amazon ( AMZN ) rose 5%, Netflix ( NFLX ) rose 10% and Alphabet ( GOOGL ) was 4.3% higher.

"I thought stock market concerns about growth were overblown," said Gus Faucher, chief economist at PNC. "This proves I was correct."

A sigh of relief

At the American Economic Association conference in Atlanta Friday morning, Federal Reserve Chairman Jerome Powell reiterated the strengths of the economy but also signaled the Fed would remain flexible in its management of interest rates. The Fed has worked to gradually increase interest rates over the past couple years, unnerving investors who worried the Fed could bring about a recession by hiking rates too quickly.

"Investors are breathing a sigh of relief right now," Sam Stovall, chief investment strategist at CFRA Research, told CNN.

The central bank indicated at last month's meeting that the economy likely warranted two rate increases in 2019.

But Powell struck a more cautious stance on Friday about future moves. Although Powell called the December jobs report "very strong," he stressed that the Fed is "always prepared" to shift the stance of policy if needed.

"We will be patient as we watch to see how the economy evolves," Powell said.

Strong jobs market

Friday's jobs report signaled the US economy still has some strength left in it.

Employers added 312,000 jobs in December, well more than economists had forecast. Friday's jobs report was the biggest surprise of the economic cycle, according to Goldman Sachs

The unemployment rate rose to 3.9% because many people reentered the workforce. And paychecks grew a better-than-expected 3.2% from a year ago as employers raised wages to attract new workers. Average hourly pay was up 3.2% compared to a year earlier. The average number of hours people worked also edged up.

"It seems to be a pretty good indication that the economy isn't anywhere close to recession, at least for now," said Brian Rose, chief Americas economist at UBS Asset Management.

China stimulus

Stocks also got a boost after China took steps to encourage bank lending and stimulate the country's flagging economy. The People's Bank of China announced it would slash the amount of money that banks are required to hold in reserve, the latest in a series of policy changes the government has taken to support growth.

China's slowing economy has been a prime factor in the extreme market volatility of the past several months.

Analysts at Macquarie Capital said that the rate cut shows government efforts to support the economy have now moved to the "second level" and should signal to investors that more stimulus is in the pipeline.

Roller coaster ride

The up and down market continues.

Stocks tumbled Thursday. The Dow plunged 660 points , following Apple's ( AAPL ) warning that its sales would fall well short of guidance, largely because of China's economic slowdown. They fell even further after a weak manufacturing report suggested the trade war was harming both China and the United States' economy.

Stocks have been unusually volatile in recent weeks. The S&P 500 was up or down more than 1% nine times in December, compared to only eight times in all of 2017.