U.S. stocks rallied on Friday, buoyed by a revival in the tech sector after a week of big data and earnings, and investors looked forward to policy changes under the incoming Trump administration. Nvidia (NVDA, Financial), Tesla (TSLA, Financial) and other companies helped the Dow Jones Industrial Average rise 1.1%, the S&P 500 up 1.2% and the tech-heavy Nasdaq Composite over 1.7%.

After recent softening inflation data, this optimism. The Core Consumer Price Index (CPI) rose less than expected from a year earlier, and the Producer Price Index (PPI) also printed a smaller-than-expected increase for December. As a result, 10 Y Treas yield came down to ~ 4.6%, buoying expectations of Federal Reserve interest rate cuts in 2025.

The Dow and S&P 500 have advanced 3.9% and 3%, respectively, for the week, their biggest weekly gains since the U.S. presidential election in November. The Nasdaq Composite has gained 2.5 per cent week to date and is poised for its best one-week performance in nearly 180 days.

Strong earnings reports from major financial institutions add to the market's positive trajectory, and rate concerns ease. Now investors are watching upcoming economic data like industrial production and the housing market will the economy's momentum, and if so, what it means in terms of future monetary policy decisions.