US stocks surged Friday after the government's jobs report for December showed wage growth for American workers slowed.

The Labor Department said average hourly earnings gained 0.3% last month, less than the 0.4% consensus estimate from a Bloomberg survey of economists. Headline hiring of 223,000 was stronger than the 200,000 consensus estimate. The unemployment rate plunged to 3.5% from 3.6%. 

While stocks advanced, the holiday-shortened week that kicked off trading in 2023 may still leave key equity gauges lower. The S&P 500 and the Nasdaq Composite were looking at a fifth straight week of losses. 

Here's where US indexes stood at the 9:30 a.m. opening bell on Friday: 

•  S&P 500: 3,834.60, up 0.70%

• Dow Jones Industrial Average: 33,212.01, up 0.86% (281.93 points)

• Nasdaq Composite: 10,355.04, up 0.48%

"A lower unemployment rate and weaker average hourly earnings growth is certainly going to get equity market bulls' attention," Seema Shah, chief global strategist at Principal Asset Management, in a note.

"Yet, with the unemployment rate back to the historic low of 3.5%, how realistic is it to expect wage growth to move meaningfully lower? The Fed will likely be skeptical," Shah added. "And so, with the record low unemployment rate indicating that there is still so much work ahead of them, Fed policy rates are set to rise above 5% within just a few months and a hard landing looks to be the most likely outcome this year." 

Among individual stocks, Tesla plummeted after the electric vehicle maker cut its prices on its Model 3 and Model Y vehicles in China.