That didn’t dash Wall Street’s optimism of a Fed rate cut happening as soon as next spring. Investors see a nearly 56 per cent chance of it happening in March, up from just a 21 per cent chance a week ago, according to data from CME Group.

Treasury yields have been broadly falling amid sentiment that the Fed’s aggressive rate hike policy is finished and potentially heading for a reversal. The trend continued Friday. The yield on the 10-year Treasury, which influences mortgage rates, fell to 4.21 per cent from 4.34 per cent late Thursday. It was as high as 5.00 per cent in October.

The yield on the two-year Treasury fell to 4.55 per cent from 4.70 per cent late Thursday. Falling bond yields have helped relieve pressure on stocks, especially technology stocks.

Investors entered December on track to close out the year with solid gains. The S&P 500 is up 19.7 per cent and the Nasdaq composite is up 36.7 per cent in 2023. Smaller-company stocks have also recently turned higher for the year following the market’s recent rally. The Russell 2000 index is now up 5.8 per cent for the year.

All told, the S&P 500 rose 26.83 points to 4,594.63, its highest level since March 30, 2022. The Dow added 294.61 points to close at 36,245.50. The Nasdaq gained 78.81 points to finish at 14,305.03.

European markets closed higher and Asian markets finished mostly lower.

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Industrial stocks were among the biggest gainers Friday. Construction equipment maker Caterpillar rose 2.4 per cent and railroad operator Union Pacific rose 2.7 per cent.

Elsewhere in the market, computer maker Dell fell 5.2 per cent after giving investors a weaker-than-expected revenue forecast. Beauty products retailer Ulta Beauty jumped 10.8 per cent after reporting results that beat estimates.

The price of US crude oil fell 2.5 per cent. Oil prices and US petrol prices have been broadly easing for several months. That’s helping to relieve pressure on American families and businesses from rising prices.