An increasingly optimistic outlook on the U.S. economy led investors to dump government bonds and pile into economically sensitive sectors of the stock market on Friday.
The S&P 500 ticked higher 0.2%. The Nasdaq Composite added 0.4%. The Dow Jones Industrial Average added around 88 points, or 0.3%.
In bond markets, the yield on the 10-year Treasury note rose to 1.335%, from 1.286% on Thursday.
The jump in stocks and bond yields comes as fresh economic data has stoked enthusiasm about the U.S. recovery. On Friday, new data showed that business activity in the U.S. private sector held up, boosted by accelerating service activity and manufacturing output. That followed a report Wednesday that showed consumers used stimulus checks to boost retail spending in January to the largest increase in seven months. Some economists have increased estimates of gross domestic product for the first quarter of the year.
JPMorgan Chase & Co. strategists said Friday that they expect consumers to shatter expectations for the rest of the year given expected fiscal stimulus and economic reopening as the pandemic eases. Meanwhile, Federal Reserve Bank of Boston President Eric Rosengren said he expects the economy to pick up steam this year as vaccines as distributed.