NEW YORK (AP) — Stocks rose broadly on Wall Street late Friday, adding to weekly gains for the major indexes.
The S&P 500 was up 1% as of 12:37 pm Eastern with nearly 90% of the benchmark’s stocks gaining ground. He is on track for his first four-week winning streak since last year.
The Dow Jones Industrial Average rose 258 points, or 0.8%, to 33,594 and the Nasdaq rose 1.4%.
Small company stocks also posted big gains in a sign that investors are confident in the economy. The Russell 2000 rose 1.5%.
Technology and communications stocks had some of the biggest gains. Chipmaker Nvidia rose 3.1% and Facebook parent Meta rose 1.7%.
Energy companies lagged the market as US oil prices fell 2.4%. Chevron fell 1%.
Trading has been choppy for much of the week, but the major indexes were up sharply and pared most of their gains on Wednesday after a report showed inflation cooled more than expected in the month past
The Federal Reserve’s struggle to tame higher prices remains a priority for Wall Street. Investors had hoped to see some relief from the highest inflation in four decades and stocks rallied on Wednesday after an encouraging consumer prices report from the Labor Department.
The Fed has raised interest rates in hopes of slowing the economy and cooling inflation, but investors are worried it could cut back too aggressively and risk the economy slipping into recession. The cooler-than-expected reading on consumer prices bolstered hopes among investors that inflation may be nearing a peak and that the Fed may moderate rate hikes.
A report on Thursday showed that wholesale inflation also slowed more than economists expected last month. On Friday, a University of Michigan poll showed consumer sentiment stronger than economists expected.
However, inflation is still painfully high, and the Fed is likely to stay the course with rate hikes until it is confident that prices have peaked and are coming down. The Fed’s last two hikes were 0.75 percentage points. Traders now see a 60% chance the central bank will raise overnight interest rates by half a percentage point at its next meeting.
“The market’s strength is based on the assumption that inflation has peaked and the Fed can ease, but that may be a bit too complacent,” said Liz Ann Sonders, chief investment strategist at Charles Schwab.
The 10-year Treasury yield fell to 2.86% from 2.88% late Thursday. It remains below the two-year yield. This is an unusual reversal of the expectation that borrowing money for a longer period should cost more than a shorter period. When investors demand a higher return for a shorter term like 2 years than a longer one like 10 years, some investors see this as a reliable sign of a pending recession and the economy has already contracted for two consecutive quarters.
Wall Street will get more details on the economy next week when the Commerce Department releases its retail sales report for July and retail giant Walmart reports its latest financial results.
Investors can also gauge the health of the housing market when they get a report on July home sales and Home Depot’s latest earnings.