By Kanchana Chakravarty and Sukriti Gupta

(Reuters) -U.S. stocks rose on Friday after a better-than-expected jobs report calmed worries about the economy, while Tesla rebounded from a sharp plunge a day earlier and technology stocks continued to rise.

Data showed nonfarm payrolls increased by 139,000 jobs last month after rising by a downwardly revised 147,000 in April. Economists polled by Reuters had forecast payrolls advancing by 130,000 jobs.

The unemployment rate stood at 4.2%, in line with expectations.

"The market is clearly skittish about economic risks – but so far the data is holding on nicely," said Seema Shah, chief global strategist at Principal Asset Management.

"This is not a labor market which is starting to fall apart at the seams."

Following the report, traders bet that Federal Reserve policymakers have little reason to rush on rate cuts. They are seen waiting until September to cut rates, with just one more cut in view by December, based on interest rate futures. The central bank's policy meeting is due later this month.

Weaker-than-expected private payrolls numbers and surveys on services sector this week had raised concerns about an economic slowdown caused by trade uncertainties.

White House trade adviser Peter Navarro said the planned meeting between U.S. and Chinese official on trade is expected to take place within seven days.

Trump and Chinese leader Xi Jinping spoke on Thursday after weeks of brewing trade tensions and a battle over critical minerals. The leaders, however, left key issues unresolved for future talks.

U.S. equities rallied sharply in May, with the S&P 500 index and the tech-heavy Nasdaq scoring their biggest monthly percentage gains since November 2023, thanks to softening of Trump's harsh trade stance and upbeat earnings reports.

The S&P 500 hit its highest in over three months on Friday and remains nearly 2.4% below record highs touched in February. The Dow index also rose to a three-month high.

At 11:36 a.m. ET, the Dow Jones Industrial Average rose 330.86 points, or 0.78%, to 42,650.60, the S&P 500 gained 51.23 points, or 0.86%, to 5,990.53 and the Nasdaq Composite gained 202.24 points, or 1.05%, to 19,500.69.

Ten of the 11 major S&P 500 sub-sectors rose, led by energy sector with a 1.9% rise, while technology stocks gained 0.9%.

Shares of Tesla jumped 5.5% after plunging about 15% on Thursday following Trump's public feud with Musk, including threats to cut off government contracts with Musk's companies.

Other megacap companies including Amazon was up 1.5%, while Alphabet gained 2.6%.