US Stocks Rally To Close Week Higher

Wall Street rallied on Friday to end a volatile week, as US Treasury yields eased and economic data helped investors look past the growing likelihood that the Federal Reserve will have to keep its restrictive policy in place until late in the year.

All three major US stock indexes surged more than 1 percent, with the tech-laden Nasdaq climbing close to 2 percent with a boost from interest rate sensitive megacaps. US Treasury yields eased in the wake of comments from Fed officials that calmed fears over inflation and interest rates.

"It continues to be all about the Fed and how gracefully they can slow the economy," said David Carter, managing director at JPMorgan Private Bank in New York. "The Fed is telling markets what they want to hear but also injecting the caution that rates may need to go higher depending on the economic data."

For the week, the indexes notched gains, with the S&P snapping a three-week losing streak and the Dow, returning to positive territory year-to-date, enjoyed its first weekly advance since late January.

"It’s an indication that a shift is transpiring," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. "And a lot of people are suspect of it, but they don't want to be left behind."

Economic data released on Friday showed steady demand for services, with purchasing managers' indexes (PMI) from the Institute for Supply Management and S&P Global indicating that activity in the sector continues to expand even as input prices cool.

"Investors saw what they wanted in the ISM data, which was basically healthy growth with slowing prices," Carter added. "It suggests they are willing to stay on the plane as they are less worried about the landing."

The Dow Jones Industrial Average rose 1.17 percent, to 33,391, the S&P 500 gained 1.61 percent, to 4,046 and the Nasdaq Composite added 1.97 percent, to 11,689.

Apple jumped 3.5 percent after Morgan Stanley said the stock could rally more than 20 percent this year on a potential hardware subscription.

Broadcom advanced 5.7 percent after the chipmaker forecast second-quarter revenue above analysts' estimates as increased investments in AI spurred demand for chips.

Among losers, Costco Wholesale slipped 2.1 percent on the heels of its revenue miss, as high inflation dampened consumer demand. (Reuters)