Helping to support equities, the yield on the benchmark 10-year Treasury note was little changed following a surge in the previous session that was triggered by a weak 30-year bond sale and Fed chief Jerome Powell’s “sterner” tone on policy.
The S&P 500 gained 1.56 per cent to end at 4,415.26 points, while the Nasdaq Composite gained 2.06 per cent to 13,799.47.
The Dow Jones Industrial Average rose 1.16 per cent to 34,286.52.
The Nasdaq 100 climbed the most since May, with Microsoft hitting a record and Nvidia extending its advance into an eighth session.
“Thursday’s 30-year Treasury auction in the US was bad. And this time, the bad auction got the anticipated reaction,” Ipek Ozkardeskaya, senior analyst with Swissquote Bank, said.
“The US Treasuries saw a sharp sell-off, especially in the 20 and 30-year papers. The US 30-year yield jumped 22 basis points, the 20-year yield jumped more than 20bps, while the 10-year yield jumped 18bp to above 4.6 per cent.
“Then, the Fed chair Jerome Powell’s speech at an IMF event was hawkish. Powell repeated that the FOMC will move carefully and that the Fed won’t hesitate to raise the interest rates again, if needed.”
Investors are also looking ahead to next week’s reports on inflation and other economic data.
Data on Friday showed US consumer sentiment fell for a fourth month in a row in November, and households’ expectations for inflation rose again.
The euro edged higher after European Central Bank president Christine Lagarde said that keeping the deposit rate at 4 per cent should be enough to tame inflation, but officials will consider raising borrowing costs again if they need to.
“Unideal political news from Spain and Portugal, and a morose economic outlook for the eurozone will likely keep the euro in retreat against the US dollar,” Ms Ozkardeskaya said.
“Even though the ECB officials cry out loud that the rates will stay high for long in the eurozone as well, it sounds much less credible when economic data doesn’t give sufficient support.”
Meanwhile, Bitcoin hovered near $37,000, its highest price in 18 months.
Investors’ hopes in the Bitcoin market rose pending the approval of Bitcoin exchange-traded funds by the US Securities and Exchange Commission, according to Rania Gule, market analyst at XS.com.
“This sudden price movement in Bitcoin comes as investors continue to await approvals for Bitcoin ETFs, amid expectations of the US SEC approving all 12 applicants for exchange-traded BTC funds,” she said.
“This coincides with the approaching anniversary of the FTX disaster, which has been in bankruptcy proceedings for almost a year.”
The US SEC has initiated discussions with Grayscale Investments to discuss details about its application to convert the Bitcoin trust fund into a spot Bitcoin ETF, Ms Gule said.
This increase in the cryptocurrency markets is an extension of the rise that began last October, attributed to the increased likelihood of the SEC approving ETFs that directly hold Bitcoin, she added.
Oil advanced, but still notched a third straight weekly drop on growing concerns over global demand and the unwinding of the Israel-Hamas war’s risk premium.