On Friday, stocks surged, ending a volatile week on a high note as investors reacted to new U.S. inflation data.

The Dow Jones Industrial Average gained 654.27 points (1.64%) to close at 40,589.34, the S&P 500 rose 1.11% to 5,459.10, and the Nasdaq Composite climbed 1.03% to 17,357.88.

The rally was driven by a combination of oversold market conditions, a stronger-than-expected GDP report, and optimism about potential Federal Reserve rate cuts.

The personal consumption expenditures (PCE) price index, a key inflation measure, rose 0.1% monthly and 2.5% annually, aligning with expectations, CNBC has reported.

This led to increased investor confidence and hopes for further rate cuts later in the year.

Written by B.C. Begley