S&P 500 Index Gains Traction After Dovish Federal Reserve Comments

The U.S. stock market saw a positive day on Friday as the S&P 500 index rose following comments from a Federal Reserve official that were seen as dovish. Gaining traction in the middle of the day, the major U.S. equity index rose, snapping three straight weeks of losses. The Dow Jones Industrial Average rose by 153.43 points, or 0.58%, to 26,719.13. The S&P 500 gained 20.99 points, or 0.72%, to 2,945.83, while the Nasdaq Composite increased by 111.91 points, or 1.35%, to 8,392.79.

AI stocks were big winners on Friday after C3.ai posted solid earnings and guidance. Other tech stocks such as Apple, Facebook and Microsoft rose, with Apple leading the way up 1.2%. Financials, however, were among the biggest decliners, with the S&P 500 Financials index falling by 0.4%.

The comments from Federal Reserve official James Bullard, president of the St. Louis Fed, that the central bank should be patient in raising interest rates and that it should pause rate hikes until inflation becomes an issue, were seen as dovish and helped to boost the market. This comes a day after the U.S. Treasury's 10-year yield surged above 4%, which caused stocks to fall.

U.S. stocks had returned to their cautious ways after their resilience performance on Thursday. Major indexes had climbed as gains across sectors offset declines in financial and consumer discretionary shares. About 99% of all S&P 500 companies have reported their fourth-quarter earnings, and the results, particularly for tech companies, have been strong.

Stocks rose Thursday in an afternoon rally as traders tried to shake off concerns over higher interest rates. Fair Isaac & Co. (NYSE:FICO) was added to the S&P 500 index, part of the index's quarterly rebalancing. This indicates that the company is now more important to the market than it was before.

Overall, the major U.S. indexes finished the week higher, with the S&P 500 closing 0.9% higher, the Dow Jones Industrial Average rising 0.7% and the Nasdaq Composite closing 1.5% higher.