The S&P 500 gained 1% to make up for its day-old losses. The benchmark index closed higher in four of the five previous days and was 3.8% higher for this week.
The Dow Jones Industrial Average climbed 0.6%, while the Nasdaq composite gained 0.7%. Both are recovering from early declines. The Russell 2000 index was 0.4% lower because smaller companies stocks lag the larger market.
The market saw a late surge of buying, consolidating the gains. It had been trading between small gains or losses after the government reported another large rise in inflation last month.
According to the Bureau of Labor Statistics, prices for U.S. customers increased 6.8% in November over a year ago. Americans are experiencing the highest annual inflation rate since 1982 due to rising costs of food, energy and housing. Core prices, which exclude energy and food, increased 4.9% in a year.
Markets were still relieved to see the report in line with their expectations.
Mike Loewengart (managing director, investment strategy, E-Trade) stated that many people have experienced the inflation effects in their daily lives. "This likely isn’t a big shocker to the markets."
The S&P 500 saw a 44.57 point increase to 4,712.02, an all-time high. It reached its previous record on Nov. 18.
The Dow rose 216.30 points, to 35.970.99. Tech-heavy Nasdaq increased 113.23 point to 15,630.60. The Russell 2000 lost 8.40 points, to 2,211.81. All indexes posted weekly gains.
This latest inflation data is available ahead of next week's Federal Reserve two-day policymakers meeting. The central bank has increased its rate of bond purchases to keep interest rates low due to rising inflation.
Jay Powell, Federal Reserve Chair, suggested that the central bank might move faster to reduce, or taper the amount of bonds it has been buying each month in order to maintain low long-term interest rates.
Analysts believe that the Fed is under increasing pressure to act on Powell's comments due to the rising inflation numbers. Investors also believe that the Fed will raise interest rates from their current low levels in the middle next year.
"The Fed's determination to accelerate tapering will be reinforced by the inflation print this morning." Anu Gaggar is the global investment strategist at Commonwealth Financial Network. "With the strength of the economic recovery it is time for us to put the crutches down," he said.
Stocks have rebounded this week, despite a Thursday decline. This is after two weeks of volatile trading which left the S&P 500 with consecutive weekly losses. After the announcement of COVID-19's omicron variant, the index has recovered most of its losses. The year's increase is now at 25.5%
Omicron has shown encouraging signs this week that it may not be as dangerous as delta, easing investor concerns. Pfizer stated this week that it has confirmed that the COVID-19 boosters used by the drugmaker provide protection against the new strain.
Over 70% of stocks in the S&P 500 rose after technology companies did most of the heavy lifting. After reporting strong quarterly results, Oracle, a business software company, saw a 15.6% increase. Apple and Microsoft each increased 2.8%.
The S&P 500 was also lifted by household goods sellers and manufacturers. Costco rose 6.6% while Coca-Cola rose 2.6%
Energy futures closed higher. The U.S. crude oil price rose by 1%. This helped to give the S&P 500 a slight boost in energy sector stocks. Devon Energy rose 2.6%.
The 10-year Treasury note yield fell to 1.488% from 1.51% shortly before the inflation report was published. The yield on the 2-year note fell to 0.66%.