Walmart and Coca-Cola led the way for the Dow, rising 2.7% and 3.3%, respectively. Tech and energy were the best-performing sectors in the SP 500, gaining 1.1% and 1.9%, respectively.
For the week, the Dow rose 2.6% for its third weekly gain in four week. The SP 500 and Nasdaq both notched five-week winning streaks, rising over 3% each. This marks the SP 500’s first five-week winning streak since late 2019. It’s also the longest run for the Nasdaq since a six-week win streak that ended in January.
Friday’s gains put the SP 500 on track for its biggest August gain since 1984. The broader market index is up 7.2% month to date.
“For now, stocks seem to be enjoying the best of both worlds as they are seeing signs of improving economic momentum while monetary stimulus continues to be very accommodative – and more fiscal stimulus is likely on the way,” Yousef Abbasi, global market strategist at StoneX, said in a note.
Wall Street was coming off a mixed performance after the Federal Reserve on Thursday unveiled a major policy shift, allowing inflation and employment to run higher to continue to support the economy.
The move indicates that interest rates are likely to stay near zero for a long period of time. The central bank previously hiked rates preemptively to head off higher levels of inflation.
“The announcement of a move towards an asymmetric unemployment approach is very important and a welcome development,” Greg Daco, chief U.S. economist at Oxford Economics, said in a note. “The Fed will be in no hurry to raise rates. If and when the unemployment rate falls, the Fed will strive to ensure that the benefits from looser policy are as inclusive as possible.”
On the data front, U.S. consumer spending rose 1.9% in July, topping a Reuters forecast of a 1.5% gain, the Commerce Department said. Personal income was also stronger than expected, rising 0.4% while economists had forecast a drop of 0.2%.
Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.