Stocks rally , close first winning week in a month

Stocks rallied on Wall Street, climbing to their biggest gain in six weeks Friday.

The S&P 500 jumped 1.6% and marked its first win- ning week in the last four. Big gains for tech giants like Apple helped propel the Nasdaq composite to an even bigger gain of 2%.

The Dow Jones Indus- trial Average also rose. The gains came as easing bond yields took some pressure off the stock market.

Stocks have found their feet following a swift rise and fall to start the year. Reports on the economy were mixed, which helped to slow the swift recent ascent for Treasury yields.

The central guidepost moving markets recently has been where inflation is heading and what the Federal Reserve will do about it.

“I’d love to talk about other things, but the only things that matter are the Fed and trajectory of inflation,” said Amanda Agati, chief investment officer of PNC Asset Management.

Early in the year, Wall Street rallied on hopes that cooling inflation would get the Fed to take it easier on its hikes to interest rates. Such increases can drive down inflation by slowing the economy, but they also raise the risk of a recession later on and hurt prices for investments.

Last month , t he rally went into reverse after several reports on the economy came in hotter than expected. They included data on the jobs market, consumer spending and inflation itself at multiple levels.

The strong data raised concerns about continued upward pressure on inflation. That forced Wall Street to abandon hopes for rate cuts this year and raise its expectations for how high rates would go.

On Fr i day, more data sh owed up to show the economy is in better shape than thought: Growth for services industries last month was a touch stronger than economists expected. That’s a good sign for the economy and helps calms worries about an imminent recession, particularly when manufacturing has been struggling. But it also could add pressure on inflation.

Instead of sending stocks lower and yields higher, as stronger-than-expected data did much of last month, markets reacted in the opposite way.

The yield on the 10-year Treasury fell back to 3.96% from 4.06% late Thursday. It’s a respite from its shot higher over the last month as expectations rose for a firmer Fed. The two-year yield, which moves more on expectations for Fed action, also fell modestly.

Underneath the surface of the report were some potentially encouraging bits for inflation. Prices are still rising for prices paid by services organizations, but the growth decelerated in February.

“We started off the year with a delusional, deranged or even unhinged market rally that just made no sense at all,” Agati said. “That delusion is still sitting in the background clearly, even though we are starting to get some of that reality check.”