U.S. stocks closed sharply higher Friday, extending a monster rally in equities that saw the big three indexes sweep to their biggest weekly gains of 2023. The Dow Jones Industrial Average DJIA, +0.66% rose about 222 points, or 0.7%, ending near 34,061 on Friday to score a 5.1% weekly gain, according to preliminary FactSet data. The S&P 500 index SPX, +0.94% gained 0.9% Friday and 5.9% for the week, while the Nasdaq Composite Index COMP, +1.38% climbed 1.4% for a 6.6% weekly gain.
That reignited hopes that the Fed might make a policy pivot to a regime of lower interest rates next year, after tough talk in recent months on the need to likely keep them elevated for longer than earlier anticipated. With that backdrop, bond yields tumbled, with the 10-year Treasury yield TMUBMUSD10Y, 4.521% falling back to 4.557% after briefly touching 5% in recent weeks. Treasury exchange traded funds also rallied, including with the popular iShares 20+ Year Treasury Bond ETF, TLT, +0.