* Unemployment rate hits 18-year low
* Markets calmed as Italy forms coalition government
* S&P technology index hits record high
* Indexes up: Dow 0.9 pct, S&P 1 pct, Nasdaq 1.4 pct (Updates to late afternoon)
By April Joyner
June 1 (Reuters) - Wall Street stocks rose on Friday after the latest monthly jobs report pointed to strength in the U.S. economy and political tensions in Italy eased.
Technology stocks led the rally, with gains in behemoths such as Apple, Microsoft and Alphabet lifting the S&P tech index to a record intraday high.
Government data showed that the U.S. economy added 223,000 nonfarm jobs in May, topping the average estimate of economists polled by Reuters. The unemployment rate fell to an 18-year low of 3.8 percent. Data on construction spending and industrial production also pointed to accelerating economic growth.
Markets also got a reprieve as Italy installed a coalition government, removing the risk of a repeat vote dominated by debate on whether the country would leave the euro.
"Strong data across the board is giving confidence to the Street that the first-quarter softness we saw in GDP was transitory," said Anwiti Bahuguna, senior portfolio manager at Columbia Threadneedle Investments in Boston. "On the back of it, there is some stability on the European political front."
The Dow Jones Industrial Average rose 182.63 points, or 0.75 percent, to 24,598.47, the S&P 500 gained 24.27 points, or 0.90 percent, to 2,729.54 and the Nasdaq Composite added 96.37 points, or 1.29 percent, to 7,538.49.
In the view of some investors, the strong economic data raised the likelihood the Federal Reserve will raise interest rates four times this year. Concerns that rising rates will dampen future growth have sent U.S. stocks tumbling on several occasions this year. But investors said they did not find Friday's data concerning.
"The market will be driven by the strength of fundamentals," Bahuguna said.
However, investors are keeping an eye out on developments around trade after Washington imposed steel and aluminum tariffs on imports from Canada, Mexico and the European Union.
Canada and Mexico retaliated, targeting U.S. steel and aluminum imports and products such as whiskey and blue jeans.
The Nasdaq was just over 1 percent away from a record high as tech stocks largely cushioned the index in the past week even while the broader markets suffered. By comparison, the S&P 500 is 4.7 percent off its peak.
"Tech isn't in the headlines as groups that are going to be impacted by what's going on with regards to tariffs in the EU, whereas others are," said Daniel Morgan, portfolio manager at Synovus Trust in Atlanta.
Advancing issues outnumbered declining ones on the NYSE by a 2.29-to-1 ratio; on Nasdaq, a 2.05-to-1 ratio favored advancers.
The S&P 500 posted 27 new 52-week highs and eight new lows; the Nasdaq Composite recorded 163 new highs and 38 new lows. (Additional reporting by Medha Singh in Bengaluru; Editing by Arun Koyyur and Nick Zieminski)