STORY: U.S. stocks rallied on Friday with the S&P 500 and Dow notching their biggest weekly percentage gains since early November... and the Nasdaq registering its best week since early December.
The Dow gained almost eight-tenths of a percent, the S&P 500 climbed 1% and the Nasdaq added one-and-a-half percent.
Markets are awaiting policy changes from incoming President Donald Trump, who will be sworn in on Monday.
Some investors fear his proposed tariffs could rekindle inflation and slow rate cuts from the Federal Reserve.
But two benign inflation prints this week eased concerns that inflation would resurge and boosted expectations that the Fed would bump up the timing and size of rate cuts.
Other data this week also fueled market optimism, said Chris Konstantinos, chief investment strategist at RiverFront Investment Group.
"We had retail sales come in pretty strong. We've seen house prices do pretty well this week. Industrial production was an upside surprise. So you put all this, you put all these data points together, and really what it points to, is a bit of a continuation of a Goldilocks theme that we saw for much of 2024, which is very solid economic growth, but not so hot that, you know, the Fed put, so to speak, is totally off the table in terms of, you know, seeing interest rate cuts here in 2025. So, that's a pretty good backdrop for stock investing, in my opinion."
Strong results from big banks this week kicked off earnings season, with the S&P 500 bank index up nearly 7% for the week.
Among Friday's movers, Nvidia gained 3% and Broadcom added 3.5% after Barclays raised its price targets on the stocks.
Shares of Intel surged nine-and-a-quarter percent on speculation of a takeover.
And Qorvo shot up nearly 14.5% after activist investor Starboard Value disclosed a stake in the chipmaker.
Markets are closed Monday for the Martin Luther King Jr. Day holiday.