Wall Street rebounds with strong rally

All 3 indexes enjoy minimum 1% rise for best day in 6 weeks

NEW YORK — Stocks rallied Friday to send Wall Street to its best day in six weeks.

The S&P 500 rose 1.6 percent to cap its first winning week in the last four as relaxing yields in the bond market took some pressure off Wall Street. It has found some stability following a swift rise and fall to start the year.

The Dow Jones Industrial Average climbed 387 points, or 1.2 percent, while the Nasdaq composite jumped 2 percent.

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, momentum swung and stocks fell after 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 Friday, more data arrived 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 for much of February, markets reacted in the opposite way.

The yield on the 10-year Treasury fell back to 3.96 percent from 4.06 percent late Thursday. It’s a respite from its shot higher over the last month as expectations rose for a firmer Fed.

All told Friday, the

S&P 500 rose 64.29 points to 4,045.64. The Dow gained 387.40 to 33,390.97, and the Nasdaq jumped 226.02 to 11,689.01.