U.S. stocks were up Friday afternoon, with all three major benchmarks heading for weekly gains, as Treasury yields fell even after Federal Reserve Chairman Jerome Powell said it was too soon to begin talking about rate cuts.

How stock indexes are trading

  • The Dow Jones Industrial Average
    was up almost 264 points, or 0.7%, at around 36,215.

  • The S&P 500
    gained 24 points, or 0.5%, to nearly 4,592, on track to eclipse its 2023 closing high of 4,588.96 set on July 31.

  • The Nasdaq Composite
    rose 67 points, or 0.5%, to nearly 14,293.

For the week, the Dow was on track to gain 2.3% while the S&P 500 was on pace to rise 0.7% and the Nasdaq was heading for a 0.3% increase, according to FactSet data, at last check.

What’s driving markets

U.S. stocks were advancing Friday afternoon, with the S&P 500 trading around its highest close of 2023 and the Dow breaking above 36,000 for the first time since January 2022, according to Dow Jones Market Data.

Falling bond yields are helping to lift the U.S. equities market. After four straight days of gains, the Dow is on pace to rise for a fifth straight week, its longest winning streak since Nov. 5, 2021, FactSet data show.

The 10-year Treasury yield has come down “pretty substantially” over the past month and that decline is continuing, said Josh Jamner, investment strategy analyst at ClearBridge Investments, in an interview Friday. “The lower 10 year is what’s driving the stock market higher.”

Treasury yields have declined on investor expectations that the Federal Reserve may begin cutting interest rates next year.

See: Dow near record high because traders are calling bluff on ‘higher-for-longer’ Fed

Yet Fed Chair Jerome Powell said Friday in remarks at Spelman College in Atlanta that “it would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance, or to speculate on when policy might ease. We are prepared to tighten policy further if it becomes appropriate to do so.”

Despite Powell’s tough talk on rates, Treasury yields continued to fall, while the S&P 500 swung higher after in November booking its biggest monthly gain since July 2022, FactSet data show.

The yield on the 10-year Treasury note
fell 12.4 basis points on Friday to 4.225%, the lowest level since Sept. 1 based on 3 p.m. Eastern Time levels, according to Dow Jones Market Data. That’s down from around 5% in October.

Markets viewed Powell’s comments on Friday as “inching toward the dovish camp,” said Jeffrey Roach, chief economist at LPL Financial, in emailed commentary. “A few weeks ago, Powell said policy is restrictive but today, he believes policy is ‘well into restrictive territory.’ I think it’s fair for markets to latch on to that subtlety.”

Read: Dow near record high because traders are calling bluff on ‘higher-for-longer’ Fed

Earlier this week, encouraging inflation data and comments from Fed Gov. Christopher Waller helped fuel investor hopes for rate cuts in the first half of next year.

Investors were also weighing a fresh reading of business conditions at American factories, with the Institute for Supply Management saying Friday that economic activity in the manufacturing sector contracted in November for a 13th straight month.

See: Manufacturers still treading water, ISM survey shows: ‘Demand remains soft.’

“I think investors feel more confident that a soft landing is definitely a possibility” for the U.S. economy, said Anthony Saglimbene, chief market strategist at Ameriprise Financial, in a phone interview Friday. “The hard landing scenario is kind of coming off the table.”

Next week investors will be watching for the U.S. employment report, due out on Dec. 8, for jobs growth data in November.

Markets just had a memorable November, with big rallies in stocks and bonds. Ten of the S&P 500’s 11 sectors finished the month in the green, with energy being the sole to fall amid a drop in crude-oil prices.

“We had a very strong November,” with stock-market breadth improving, said Saglimbene. “If the rally is going to build steam, you want to see more areas of the market start to participate.”

Most of the S&P 500’s sectors were rising Friday afternoon, except for communication services
which had a modest decline of 0.3% in afternoon trading, according to FactSet data, at last check.

Companies in focus

  • Tesla Inc.

    shares fell following Thursday’s Cybertruck delivery event.

  • Salesforce Inc.

    shares continued rising a day after they contributed to much of the Dow’s Thursday gain. The blue-chip gauge was also benefiting from gains in Walgreens Boots Alliance Inc.

    and Nike Inc.


  • Shares of Fisker Inc.

    jumped after the electric-vehicle maker said it decided to cut December production to free up more than $300 million of liquidity.

  • Ulta Beauty Inc.’s

    stock surged after the beauty company beat third-quarter consensus estimates from its latest earnings report.

  • Pfizer Inc.

    shares dropped after the company said it would not move to a Phase 3 trial of a twice-daily formulation of a weight-loss drug after patients in an earlier study had a lot of side effects.

Steve Goldstein contributed to this article.

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